Category: Financing & Investment

  • How Veterans Can Use Franchise Discounts and Financing to Become Business Owners

    Many veterans, executives, and first responders reach a point where they’re ready to trade a paycheck for ownership. For veterans specifically, the transition into franchise ownership often comes with meaningful financial advantages that aren’t always widely known.

    VetFran: Franchise Fee Discounts for Veterans

    The International Franchise Association runs a program called VetFran, in which participating franchisors offer qualifying veterans a minimum 10% discount on their initial franchise fee. Hundreds of franchise brands across many industries participate, and some offer larger discounts on top of the minimum.

    Source: International Franchise Association, VetFran program (franchise.org).

    Financing Options Beyond Fee Discounts

    Fee discounts are just one piece of the picture. Veterans exploring franchise ownership commonly combine several financing paths, including SBA loans, retirement rollovers (ROBS), home equity options, and personal savings, alongside any VetFran-eligible discount their chosen brand offers.

    Why Military Experience Can Translate Well to Franchising

    Franchising rewards owners who can follow an established system, lead a team, and execute consistently, skills many veterans already bring from their service. That said, discounts and structure alone don’t guarantee the right fit. The brand, industry, and territory still need to align with your goals, budget, and lifestyle.

    Getting Guidance as a Veteran Exploring Franchise Ownership

    Gabriel Arechiga, franchise consultant and founder of What Franchise To Buy, works with veterans, executives, managers, and first responders to identify vetted franchise opportunities, including VetFran-participating brands, and to help make sense of financing options. There’s no cost to you for this guidance since Gabriel is compensated by the franchisor once a match is made.

    Call 925-705-0193 or email gabriel@thefranchiseconsultingcompany.com to schedule your free process overview call.

    Book Your Free Consultation

  • What’s Really Included in a Franchise’s Total Investment

    When you research a franchise opportunity, you’ll usually see a total investment range listed in the Franchise Disclosure Document. This figure is meant to give you a fuller picture than the franchise fee alone, but it’s still worth understanding exactly what falls inside that range and what might fall outside it.

    What the Total Investment Range Usually Includes

    The total investment range typically bundles together the initial franchise fee, build-out or leasehold improvement costs, equipment and signage, initial inventory, technology and point-of-sale systems, training-related travel expenses, and a recommended amount of working capital to carry the business through its early months.

    Why the Range Is Often Wide

    You’ll often notice this figure is presented as a range rather than a single number, sometimes spanning tens or even hundreds of thousands of dollars. That’s because actual costs vary by location, square footage, local construction and labor costs, and whether you’re leasing or purchasing property. Comparing the low end and high end can help you gauge how much variability to expect in your specific market.

    Costs That Can Fall Outside the Range

    Some costs aren’t always captured in the total investment figure, including real estate purchase costs, certain licensing or permitting fees specific to your state or municipality, and additional working capital if your ramp-up period takes longer than projected. It’s worth asking directly what is and isn’t included before you finalize your budget.

    Why Working Capital Matters More Than People Expect

    One of the most common mistakes new franchise owners make is underestimating how much cash they’ll need before the business becomes self-sustaining. Even profitable locations often take months to build a customer base, and having enough working capital set aside can be the difference between weathering that ramp-up period and running into cash flow trouble.

    Ready to Talk It Through?

    Reading through a Franchise Disclosure Document’s estimated initial investment section can raise more questions than it answers if you’re doing it alone. Reviewing it with a franchise consultant is free. You can schedule a free call with Gabriel to go over the numbers together.

  • Franchise Financing Options: How to Fund Your Investment

    Coming up with the capital to buy a franchise can feel like the biggest hurdle in the process, but most franchise buyers use some combination of financing rather than paying entirely out of pocket. Understanding the common paths to funding a franchise can help you plan realistically and move forward with confidence.

    SBA Loans

    The U.S. Small Business Administration doesn’t lend money directly, but it guarantees a portion of loans made through participating banks, which reduces the lender’s risk and often makes it easier for franchise buyers to qualify. SBA 7(a) loans are the most commonly used option for franchise financing and can typically be used to cover the franchise fee, equipment, working capital, and other startup costs.

    Rollovers for Business Startups (ROBS)

    Some buyers use funds from an existing 401(k) or IRA to finance their franchise through a structure known as a ROBS arrangement, which allows retirement funds to be invested into the business without triggering early withdrawal penalties or taxes. This approach requires careful setup with a qualified provider and isn’t the right fit for everyone, but it can reduce reliance on debt financing.

    Franchisor Financing and Third-Party Lenders

    Some franchisors offer in-house financing or have relationships with preferred lenders who are familiar with their business model, which can sometimes speed up approval. Independent equipment leasing companies and alternative lenders are also common resources, particularly for funding specific equipment or build-out costs.

    Home Equity and Personal Savings

    Many franchise buyers also draw on home equity lines of credit or personal savings to cover a portion of their investment, either as a down payment paired with a loan or as their sole funding source for smaller concepts. Combining a few of these sources is common and can sometimes result in more favorable overall terms than relying on a single lender.

    Ready to Talk It Through?

    Every financing path has trade-offs, and the right combination depends on your credit, available capital, and the specific franchise you’re considering. Working through the numbers with a franchise consultant is free. You can schedule a free call with Gabriel to talk through your options.

  • Franchise Fees and Royalties: What They Really Cover

    When people compare franchise opportunities, the sticker price of the franchise fee often gets the most attention — but it’s only part of the financial picture. Understanding what that upfront fee actually covers, and how ongoing royalties work, helps you evaluate whether an opportunity is priced fairly and budget accurately for the years ahead.

    What Does the Initial Franchise Fee Cover?

    The initial franchise fee is a one-time payment that grants you the right to operate under the franchisor’s brand and system. In most cases, it helps cover the cost of training you and your team, initial operating manuals and systems, a protected territory, and onboarding support during your first months in business. It typically does not cover equipment, inventory, or real estate, which are usually separate costs layered on top of the franchise fee.

    How Ongoing Royalties Work

    After you’re up and running, most franchisors charge an ongoing royalty, usually calculated as a percentage of gross revenue and paid weekly, monthly, or quarterly. These royalties fund the franchisor’s continued investment in the brand, including national marketing, updated technology and systems, and the field support team that helps troubleshoot issues as they come up. Royalty rates vary widely by industry and brand, so it’s worth comparing this figure across every concept you’re considering rather than looking at it alone.

    Other Fees to Budget For

    Beyond the franchise fee and royalty, many agreements include a separate marketing or ad fund contribution, technology or software fees, and renewal fees due at the end of your franchise term. Some franchisors also charge a transfer fee if you eventually sell the business. None of these are necessarily red flags, but each should be factored in when you calculate your true cost of ownership.

    How to Judge Whether the Fees Are Fair

    Rather than judging a franchise fee in isolation, look at what you get in return: the strength and recognition of the brand, the quality of training and ongoing support, and how well-established the operating systems are. A higher fee attached to a mature, well-supported brand can be a better value than a lower fee attached to a franchisor with limited infrastructure.

    Ready to Talk It Through?

    Franchise Disclosure Documents lay out all of these fees, but they can be dense and hard to compare side by side. Working through the numbers with a franchise consultant can help you understand exactly what you’re paying for. You can schedule a free call with Gabriel to go over your specific numbers.