Looking to take your franchise operation to “the next level”? Looking to turn your business into a franchise operation? Need Capital to make it all happen?
Franchising is one way of raising capital to grow a business. Often, Franchisor’s then rely on debt financing to support additional funding needs. One way to fund franchise development or expansion is to raise capital by issuing equity securities in the Franchisor company.
Unlike debt, equity requires no security, does not attract interest and is not repayable.
By issuing shares in the Franchise company, the Franchisor can fund expansion without the burden of mortgaging assets and taking personal financial risk.
Equity funding is an excellent complement to franchise funding and, like Franchisee funds, equity stakeholders provide financial support but without taking an active role in the business or a decision making role in the franchise system.
A key element of our programme is to restructure the company initially as an unlisted public company. This gives shareholders confidence about the financial aspects of the firm, creates a mechanism for selling their shares and sets a notional value on those shares. By extension, it defines the notional capitalised value of the business. Equity can be used instead of cash in a takeover, merger or trade-sale.
Public companies, even unlisted companies, usually trade at a higher earnings multiple than private companies This strategy is often a precursor to listing on a stock exchange where the business is likely to trade at an even higher multiple.
Business Growth Strategies (BGS) provides the methodology, structure, documentation, process and support to assist Franchisor’s raise capital to achieve their vision and goals. Our Capitalisation Strategy allows the Franchisor to make all the key decisions that determine the amount of funds to be raised. the quantum ascribed to new shareholders and the use to which funds raised will be put.
Our pre-float strategy does not require an expensive prospectus and can be put into place within a few months. As our fees are mainly success based, the programme is quite inexpensive to put in place. BGS also provides an IPO programme leading to a listing on a stock exchange.
If you are an established Franchisor looking to generate funds to further develop or expand your franchise system, BGS can help take your business to the next level.