Franchisers” Financing

                  

I am not an advocate of most franchising, both for a franchiser, and someone seeking to buy a franchise.

                       

My comments today are from the perspective of someone selling a franchise. But it ought to be understood by both franchiser and franchisee.

                       

The franchisee usually finds it difficult to get financing these days, so any help from a franchiser is welcome. But, I find it dangerous for a franchiser to offer financing to a franchisee unless there is firm collateral. Despite the rosy marketing and promotional material. A franchise is, after all, small business, and that entails risk.

                       

The only type of financing that makes sense is backed by account receivables. It actually ties the franchisee more closely to the franchiser. Construction, real estate and general financing does nothing that applies similarly. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)