Are there resources available to franchisors to guide them through the lender education process?
Franchisors will need to play a key role in assisting franchisees with obtaining loans. Lenders are not only looking at the strength of the franchise applicants, but also at the franchisor’s financial ability to support those in the system. The following is a partial list of available tools and resources to further prepare for educating the lending community: • Bank credit report: Reviews the franchisor’s credit worthiness and compares concepts within the industry. • Industry reports, such as IBIS World, which discuss industry trends. • Consultants with lending experience who can carry the system’s story to the financing markets and guide prospects through the lending process. • SBA Registry. Small lenders will not lend to franchisees if the system is not on the Registry. • FDD will be reviewed by all lenders. Franchisors should prepare expanded explanations for areas which better explain the data reported in the FDD. • IFA Benchmarking Study when available. • Coleman Report regarding
