Which brands are finance-friendly? 

Inside Franchise Business rounds up some brands that offer financial support or assistance for the initial costs of a franchise. There are a range options available across brands including:

• bank accreditation: where there is lending program in place with banks through the franchisor.

• manage to own: a program where a candidate can make a financial commitment to a franchise, work within the business toward ownership.

• vendor finance: a loan through a third party.

Financial support or assistance is always subject to eligibility based on each franchisor/vendor/lender’s selection criteria.

1. Bakers Delight

Bakers Delight offers a manage to own Kick Start franchise program which allows for trainees to maintain their full time employment within its network, while completing the program over a longer period, typically between six to 12 months. The program also requires a financial commitment from the Kick Start trainee which is held as a deposit and upon successful completion of the program the deposit goes towards their bakery purchase. However, Bakers Delight does look at a candidate’s financial capabilities before starting the program to ensure that upon completion, they have the minimum finance required for working capital.

2. Mail Boxes Etc (MBE)

MBE provides business to business services in design, print, and shipping. Since July 1 2016, the brand has offered finance to buyers with funds available for up to 50 per cent. The initial investment cost of an MBE franchise ranges from $100,000 to $250,000.

3. Fibonacci Coffee

Fibonacci Coffee has three models: a kiosk with basic food prep through to full cafe, as well as a cafe and bar. Depending on the model, the investment ranges from $150,000 up to $600,000 depending on the model, with a Pay-As-You-Go program available for qualified candidates. This internal finance provision can offer up to 50 per cent of the hard costs of building a shop to a potential franchisee.

4. Snooze

Snooze specialises in bedroom retailing and has been in business for 40 years. The initial costs are approximately $450,000 to $600,000.The brand offers accreditation with NAB and ANZ vendor finance to approved franchisees and can assist in pairing up the prospective franchise partner with the right contact at the bank. However, if a prospective buyer has been turned down by a bank, Snooze could offer approved candidates the option of receiving vendor finance.

5. Snap On Tools

This mobile franchise offers tools and equipment for mechanics, engineers and technicians and requires buyers to pay a $50,000 deposit to access a loan through Snap On finance. This can cover the franchise fee, training, mobile store, stock and working capital.

6. Bedshed

This bedding and bedroom furniture franchise has been in operation for 30 years and offers vendor finance for the eligible candidates. Through case-by-case basis, Bedshed can support candidates who are unable to obtain a bank loan (for example, with cash but fewer assets). The capital investment required to buy a franchise is $500,000 to $750,000.

7. Xpresso Mobile Cafe

This mobile coffee franchise has initial investment costs that range between $100,000 to $250,000. The brand has commercial banking relations with the ANZ, various equipment finance funders and trusted finance brokers.

8. Buy Australian Properties

Buy Australian Properties is a professional property investment franchise business. The initial investment is $150,000 + GST, with vendor finance available for approved applicants.

9. Ferguson Plarre

Ferguson Plarre is a 115 year old bakery chain which is celebrating this milestone by offering 10 eligible franchise candidates a $50,000 grant (per candidate). The program is available on a first-come-first-served basis. The initial investment required is $250,000 – $400,000 excluding GST.

10. Zambrero

Mexican food chain Zambrero requires an investment of $250,000 to $650,000 the following models available: kiosk, food court, strip shop and drive through. The franchise business is accredited with various banks. This can make for a smoother process of obtaining a business loan of up to 50 per cent of the capital required.

11. Total Tools

Retail chain Total Tools services the needs of tradies. The brand has accreditation with banks which helps some franchisees with their finance.  Capital required to buy a franchise is at least $500,000+.

12. Under Wraps

Under Wraps, a healthy food franchise offers financial lending packages for a percentage or up to the full cost of a franchise. It includes equipment leases and franchise fees can also be paid instalments.

13. Muffin Break

Muffin Break, part of the Foodco group, is a bakery cafe business accredited with the Big Four Australian banks (Westpac, CBA, ANZ, and NAB). A buyer may be able to borrow more against the perceived value of the business (unsecured lending), as well as against other equity (secured lending). The initial franchise costs range from $250,000 to $500,000.

14. Jamaica Blue

Cafe franchise Jamaica Blue, also a Foodco brand, is also accredited with the ‘Big Four’ Australian banks (Westpac, CBA, ANZ, and NAB). The initial investment is above $500,000.

15. The Jolly Miller

Buyers will be required to invest upfront a minimum  of $400,000 for this cafe franchise and vendor finance may be available to appropriate candidates.