Funding a Franchise May Be Easier Than You Think

It’s possible you will have sufficient savings to put towards or cover the cost of an initial franchise fee. However, most people will need to secure funding to help them purchase their franchise… and this may be easier than you think!

Upfront fees for a children’s franchise start from as little as £1,000 but are more typically in the £5,000-£12,000 range. In return, you will receive a “business in a box” with all the tools you need to succeed. Whilst these figures can seem daunting at first, finance need not be a barrier to getting going. There are several options for finding finance to help you buy a franchise – with plenty of support available to ensure the process is as straight forward as possible.

Opening Doors

Every business needs start-up capital and a franchise is just the same. But there are essential differences between going it alone and joining a franchise. There is far less risk involved in buying a franchise compared to starting a business entirely from scratch. A franchise is a proven business model. Costly mistakes will already have been made and learnt from. Understanding how best to generate a profit and build the business will be established. This opens the doors to funding sources that otherwise may not be available.

As well as a proven track record, a franchise comes with expert training and guidance. This knowledge and support will not only make a huge difference to your chances of success, it also goes a very long way to persuading lenders that their money will be in safe hands.

Approaching Lenders

Many franchise businesses have strong relationships with lenders and banks. Franchisors fully understand the process and will be ready to share business plan templates and advice with you. This will ensure that the paperwork is as painless as possible and that your chances of getting approved are as high as possible.

This sort of support is an excellent example of how being part of a franchise comes with huge benefits – from reducing stress to increasing success! You won’t be left to figure new situations out on your own. You will always have someone to guide you and your business. The amount of time and energy saved by having this expert advice every step of the way is precisely why people join a franchise in the first place. Knowing that you always have someone to turn to will make all the difference to you and your business.

The Most Popular Route

The most popular way to finance a children’s franchise business is currently via a government-backed start up loan. These are charged at a low fixed interest rate and can be repaid in 1 to 5 years. There’s no application fee and no early repayment fee.

Jane from Little Voices explains:

“Sixty percent of Little Voices franchisees have used a start-up loan to help them buy their franchise, including both the initial franchise fee and some working capital. Working out at less than £300 per month, it can be an affordable way to join our franchise and build the business of your dreams!

The application process gives you an ‘in principle’ decision within a few days – you basically need a good credit rating and history – following which you submit a business plan. It then takes 6-8 weeks to get final approval and funding.

We have a direct contact who will guide you through the whole process, and together we’ll hold your hand from start to finish.

We’ll also help you write your business plan, because that’s an important part of our own application process – it helps you understand every area of the business, and exactly what’s needed.”

The team from music franchise Rhythm Time agree:

“These must be the easiest and most successful method of finance for helping potential franchisees fund their investment that we know of. They are simple to apply for and we have had at least 6 Rhythm Time franchisees join us using this method of finance. We have not had anyone turned down!

The process is simple and done in stages, starting with a simple credit check, then completing a business plan and personal / business budget. As we have had several franchisees go through this, we have knowledge of exactly what the process is and what the requirements are and can help prospects complete these steps.”

Becky from Pop Up Play Village adds:

“The nice thing is that applicants also get a real person to speak to all the way through the process and to help with any questions. At each stage you can view your progress on your online portal. Applicants can apply for up to £25,000 and the money can then be used to fund the business.

Many of our franchisees at Pop Up Play Village have successfully applied and received a government backed start-up loan. It is a great way to fully fund the start-up costs of a franchise without needing any savings.

The application takes place online and usually takes between 4-6 weeks to complete. The loan is then paid off monthly usually spread over the term of the franchise agreement which for us is 5 years.”

Flexible Payment Terms

Some franchises are also able to offer flexible payment terms, perhaps with the option to build up over time.

One example of this is language franchise BilinguaSing:

“At BilinguaSing we currently offer a payment plan of fifty percent of the upfront fee, with the remainder being split into equal monthly payments over 12 months (interest-free).

Our fee structure also allow for you to start with one language at our lowest entry level or to create a bigger package with up to three or four languages.”

Don’t Be Shy

Children’s franchises don’t want to lose good candidates due to lack of funds. So don’t be shy to ask a about payment terms, lenders and loans.

You can also find out more information via the government website: