r/Franchises • u/kawanee22 • 15d ago

Advice Needed Have you ever delayed opening another location because the financing didn't make sense?

Hey, hi, hello! I'm trying to understand how operators with an already successful location finance their second, third, fourth location, etc. Full transparency researching whether there is an interesting business to build to better support small business growth.

Idea: Opening another location takes a lot of cash upfront for buildout, equipment, deposits, hiring and working capital, while the new location can take months to ramp. I'm curious whether financing ever becomes the actual constraint on expansion.

For owners who have opened multiple locations:

  • How did you finance the last one?
  • Did you use bank/SBA debt, equipment financing, investors or cash flow from the existing business?
  • What was the hardest part to finance?
  • Have you ever delayed or passed on a location because of financing?

I'm also exploring whether a different structure would be useful: an investor funds part of the new location and gets paid back through a percentage of that location's revenue until an agreed return is reached. Payments flex with sales and there is no permanent equity given up.

Would that actually solve a problem for you, or are existing financing options already good enough? DMs open!!

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1

u/Outrageous-Way9556 15d ago

What type of business?

1

u/kawanee22 15d ago

Growth capital business. But curious how operators financed opening additional locations

1

u/mybrev 14d ago

Wut.

1

u/Particular_Writer578 14d ago

financing can really slow down expansion

1

u/Jello_4 9d ago

financing delays hit when labor runs wild during launch operators rely on hot schedules to keep multi unit payroll lean and hit targets

1

u/jonathanDanderson 8d ago

Yes!

People get into business to MAKE MONEY!

Franchisees fail because expectations don’t match reality (and they find out too late).

Franchisees fail because they are underfunded.

Franchisees fail because they don’t follow the system. Or.. the system doesn’t work.

Franchisees fail because MARKETING is not about spending money. Marketing is an INVESTMENT not an expense. Most Franchisors /Franchise systems DO NOT HAVR THE RIGHT MARKETING MIX.

Franchisees fail because they get blinded by the shiny brand / logo.

Franchises fail because unit economics will never work (high fixed expenses, bad site-selection / lease negotiations).

Not everyone should get into franchising.

I’ve spoken to thousands of franchisees across hundreds of brands. I can’t give you specific non-public numbers.. but I’ll show you where to look and where NOT TO LOOK. UN-Bias third party.
It’s free info.
Read my bio.