Guide

How franchise buyers fund their first unit

The common ways owners cover the investment, beyond writing a check.

Few first-time owners pay the full investment in cash. Here are the routes buyers commonly combine.

SBA loans

SBA 7(a) loans are a popular path for franchises on the SBA registry. They offer longer terms and lower down payments than conventional loans.

Rollover for business startups (ROBS)

ROBS lets you fund a business with retirement savings without early-withdrawal penalties. It is powerful but has compliance rules, so use a specialist.

Conventional and home equity

Some buyers use conventional business loans or home equity lines for part of the investment.

Franchisor financing and incentives

A few brands offer in-house financing or fee discounts for veterans or first units. The FDD discloses any financing arrangements.

Compare total investment across brands first in the franchise directory, then build your funding plan around the real number.