For experienced business owners, franchises offer key benefits and expansion opportunities.
Franchises offer business ownership and expansion opportunities backed with built-in support and resources. The sector is poised to grow to
more than $921 billion in 2026, according to the International Franchise Association. For experienced business owners , franchises represent an opportunity to combine their experience with brand recognition, buying power, and operations and marketing support of another proven business. Those advantages can help business owners overcome some of the challenges that may arise with owning and operating an independent business . And existing franchise owners can continue to expand their franchise holdings with the same or different brands. In both cases, they can be a way to build momentum and grow your business, while offering several important benefits.
Previously successful business models and training
Franchisors have proven business models, including operational systems, supply chains, and marketing strategies, as well as demand for its products or services. Franchises are regulated by the Federal Trade Commission and must provide prospective franchisees with 23 specific items of information about the franchise, officers, and other franchisees. In addition, because successful franchisees help build the parent company and brand, franchisors have a vested interest in franchisee success and often provide training and other resources to help shorten the learning curve. While no business venture is risk-free, franchises can reduce or remove some common startup challenges and give your business a head start on its success.
Established brand recognition and loyalty
Because franchises are built by replicating proven products, services, and business models, they have existing marketplace awareness that new business ventures may not. In addition, franchises already have a base of loyal customers and a recognizable brand, giving new franchises a head start in building a sustainable business base.
Increased purchasing power and buying support
Because franchisors may locate suppliers and facilitate procurement for their franchisees, business owners may benefit from their franchise organization’s bulk buying power. In addition, national or regional advertising campaigns, social media efforts, and promotional materials may be provided by the franchisor, boosting visibility.
Business growth with franchises
Existing business owners can expand their business holdings through investing in franchises in addition to their current company or by expanding their existing base of franchises. These options may enable faster scaling, allowing multiple units to be operated with the same processes. For example, one back-office operation — accounting, human resources, marketing, etc. — can oversee the needs of one or multiple franchises. A Wells Fargo Business Banker may be able to help your organization finance its first franchise acquisition or discuss strategies for financing an expansion into new markets with additional franchises.
Financing your franchise
When acquiring a franchise, costs may range from real estate and equipment to marketing and franchise fees. When deciding how to finance your franchise deal, there are a few factors to consider.
First, look for a lender that has experience in franchise financing, specifically in providing start-up capital, acquisition financing, and expansion and construction financing. With nationwide reach and competitive rates, Wells Fargo Business can offer borrowing options tailored to your strategic and financial goals.
A financial team with significant franchise experience can deliver other benefits, including adeptly guiding you through the financing process, whether it’s your first franchise acquisition or an expansion. That leaves you free to focus on core operations. Whether you’re opening your first location, adding a new location, refinancing a commercial mortgage or financing a partner buyout, A Wells Fargo Business Banker can help you find the financing option that fits your business needs.
As you explore the best options for financing your franchise deal, consider different programs. U.S. Small Business Administration (SBA) loans may provide competitive rates while industry specific commercial loans may offer tailored options with other advantages including fixed and variable rates. Wells Fargo Business is an SBA Preferred Lending Program (PLP) and provides comprehensive banking solutions beyond loans. As a SBA PLP Lender, Wells Fargo Business may be able to make decisions faster than non-preferred partners, with tailored loan solutions and highly competitive rates.
Whether you’re considering expanding your business into franchise holdings or wish to grow your existing franchise ownership, make an appointment with a Wells Fargo Business Banker to discuss your next steps. If you need specialized business advisors, a banker may be able to provide some contacts to consider. The banker may also be able to help you navigate financing for the road ahead as you make plans to grow your business through franchises.
