Franchise finance can be difficult to get your head around, especially if you’re new to business. There are several options to choose from, but how do you find the best one for you?

We’ve put together a guide on the different options available, along with some helpful information on securing finance, costs, and when you’ll need a business plan.

What is a franchise?

Starting a franchise is a smart way to establish a business, while still being able to collaborate and socialise with fellow franchisees.

According to the British Franchise Association, franchising is classed as a business relationship between a franchisor and a franchisee. The franchisee typically pays an initial fee and is then able to trade under the brand name, use the business systems, and sell the products. This all falls under a franchise agreement between the franchisor and franchisee.

The franchise business model means that you get to have the experience of running your own business, without having to go through much of the hard work to set up – you can leverage the franchise brand and products to start making a profit right away.

Advantages of franchising with Premier Education

• Make use of an existing brand, proven systems, and developed products
• You’ll have a network of fellow franchisees to discuss ideas with, and find what works
• Lower-risk business option
• Business planning, operations, and recruitment support and training from us
• Additional opportunities for growth through exclusive programmes

Franchise business opportunities with Premier Education

Shared Ownership Franchise

Our Shared Ownership franchise programme is designed to help business owners get started with less investment, and less risk.

This programme, once you’ve finished the onboarding, gives you access to an exclusive territory with at least seventy-five primary schools. The overall cost of a Shared Ownership franchise is £14,995 – though all you need to get started is a deposit of £2,000. The remaining capital can be financed and provided later.

Along with your investment, you’ll also receive £10,000 of funded support from us. This support means that you will get training with no training fee for our business planning, sales, recruitment, and other skills needed as a business owner.

The Shared Ownership programme stands out for its distinctive approach, offering a gradual entry into the world of franchise ownership. Initially, you’ll hold a 51% ownership stake in the franchise, with the flexibility to acquire additional shares as your business grows. This approach enables you to establish your footing as a franchisee with reduced upfront risks, allowing you to gain greater control when you feel fully prepared.

The Gold Franchise

The Gold franchise is all about offering the best of the best. For an investment of £24,995, you’ll kickstart your journey into franchising with exclusive benefits to help you build a sustainable and profitable business more effectively.

We understand that a solid foundation is crucial for any successful business. That’s why we provide you with a personalised plan that matches your goals. Together, we’ll create a strategy that fits your vision and sets you up for steady growth.

This programme means franchise owners won’t have to pay any commissions for an entire year, giving room for more profit and better cash flow. And there’s an exclusive feature where the first 6 months of management fees are waived, making it even easier to build your franchised business.

Financing a franchise business

So, you’ve decided that starting a franchise is the right step for you and your career. Great!

At Premier Education, you can get started with an initial franchise fee deposit of £2,000, and then pay the remaining capital later. However, we understand that it’s not always easy to pull the full investment amount from thin air – and that franchise finance might be needed.

There are several ways that you can secure funding to invest in your franchise and business opportunities.

Banks

One of the most common ways for individuals to secure finance for a franchising business is through a bank loan.

Working with a bank (or a similar lender) allows you to get a business loan or credit that meets your exact needs, including finance for your remaining franchise investment, as well additional funding for working capital and equipment purchases. Most major UK banks have specialised departments to handle a franchise loan application and repayment.

To get finance through banks, you’ll need to provide a few details and documents. Each bank may have different eligibility criteria, but for most you will need to be over the age of 18, and evidence of assets that can be used as security.

When applying for a larger loan, there is a high chance that you will be required to provide additional evidence and documentation. This means you’ll need to submit a detailed business plan, financial forecasts with projected costs, and information on the profitability of your franchise opportunity. This can seem daunting to those not familiar with starting a business, which is why we’re on hand to support our prospective franchisees with business planning and other documents that are needed – though we always encourage you to take independent advice on certain aspects of the planning, like projected turnover.

Our advice to prospective and existing franchise owners is that the first port of call for loans should be your own bank, as you’ll already have an existing relationship with them.

Government start-up loan

Another option for franchise finance is with a government backed Start-up loan, which can offer amounts of up to £25,000. Unlike a business loan, this option is classed as an unsecured personal loan – meaning that you’ll need to pass a credit check.

However, this option gives you free support with creating a business plan. If successful, you’ll also receive training and 12 months of free mentoring. This can help you in the initial stages with managing costs and finding your feet as a business owner.

The interest rate for this loan is lower than many banks, so it can be a good option for those looking to keep initial costs down.

Support from family and friends

A sometimes-overlooked form of finance is borrowing from family and friends.

This if often a quicker way of securing capital, as the person you’re borrowing from already knows and trusts you. However, while this can be a quicker and easier form of funding to begin with, there are still a few important considerations you need to look at first.

It is crucial that you clearly communicate your business plan, costs, expectations, and repayment schedules beforehand – this ensures that everyone understands the risks and opportunities involved.

When obtaining finance for a franchise from friends and family, it’s sensible to create a contract that outlines the agreement – this can help all parties in the unlikely event of a dispute.

Are you ready for your franchising journey with Premier Education? Request a franchise brochure and find out more today.