It’s not easy to start a business without the funds to get it off the ground. But, if you have a goal that you genuinely want to reach, don’t give up just yet! There are many ways to subsidize your enterprise with no money.
This is where franchises come into play. Franchises are businesses that typically offer successful entrepreneurs an opportunity to purchase a share in their company and work alongside their team. Here are some of the methods of financing your franchise with no money so you can get your idea off the ground.
Superstar Success Story
A recent article tells the story of an individual who was able to start their franchise with no money. “I had always wanted to be my boss,” reads the article. The individual decided to use their life savings, which were around $10,000, to help fund their franchise.
The person in this story could find success by starting with this low sum of money. After working hard for a year, the individual found out that they had saved up around $100,000 in equity. With this equity, the person could purchase another franchise and continue growing their business.
Multiple Ways to Finance Your Franchise
One way to finance your franchise with no money is by partnering with friends or family. This can be a great opportunity for people who want to start their own business but don’t have the funds. By working together, each person can contribute, and everyone will benefit equally.
Another way to finance your franchise with no money is by using financing offered specifically for franchises. These are usually loans provided by banks or other financial institutions designed for this purpose. If you’re accepted, you’ll be able to use the loan as capital for your franchise.
A third alternative would be to use for a Small Business Administration (SBA) loan. The SBA offers low-interest loans for any startup company, including franchises, which may make it easier to purchase your franchise with no money upfront.
Financing Options
According to National Franchising Association, “franchise financing is a popular option for individuals who want the benefits of franchising but do not have enough money or who do not want to be responsible for all the capital required.”
The NFA also reports that “typically, franchise fees (initial and ongoing) are financed through a secured loan from a financial institution. The franchisor then pays the interest over the life of the loan. The borrower pays back the principal with monthly payments.”
Another way to finance your franchise is through what’s known as an Earn-Out. This type of deal allows you to borrow money from lenders in exchange for equity in your business.
An Earn-Out is advantageous because it’s less expensive than borrowing money from traditional banks. It also helps you build equity in your company before it has even started operating!
Another option is to partner with another entrepreneur who brings equal investment to your company. You can agree to split ownership in half and make monthly payments until you’ve paid off each other’s shares of ownership.
How to finance a franchise with no money
Franchises are an excellent way to kick start your business without any upfront costs. They offer franchisees the opportunity to purchase a share of their company and work alongside their team. But, before you make this decision, it’s important to weigh the pros and cons first.
#1: Purchase franchise shares
Purchase Franchise Shares – When purchasing franchise shares, one can invest in an existing business or purchase a franchise on their own. When choosing the latter option, you will be required to provide an initial investment of $5,000-$25,000, depending on what kind of franchise you’re interested in. Plus, you’ll need to meet with the franchisor face-to-face for training purposes. If you want to purchase an existing franchise, there is no cost, but you’ll have to meet with the franchisor face-to-face for training purposes.
Financing Through Family Members – Financing your franchise through family members is another possible option if no money is available up front. This method involves receiving assistance from family members by borrowing funds or obtaining loans at low-interest rates from them as well as making regular payments back over a period of time.
The amount of money needed to start a franchise with no money.
There are a few things that you need to know before purchasing a franchise with no money. First, franchises can be expensive. You will need to pay upfront costs for franchise fees, startup costs, and insurance—and all of this needs to come from your own pocket.
How much you can afford to pay for a franchise varies greatly depending on what type of business it is. For example, the average cost of starting up a restaurant franchise ranges from $121,000 – $1,111,000! If you’re looking to purchase a less expensive franchise, like a pool care company or auto detailing service, the fees won’t be as high.
You can purchase more than one business type if you want or start them at different times. This way, you won’t have to put everything on credit cards right away if it’s too expensive upfront.
If you have no money to finance a franchise, don’t worry. There are multiple ways you can finance your franchise the right way. The amount of money needed to start a franchise with no money is not very big. You can take out a small business loan, borrow from a family, or get a no-money-down franchise.