What You Need to Get Fitness Franchise Financing
If you have decided to purchase a fitness franchise, congratulations on a business move that has the potential to be financially and personally rewarding. You will need to do much research and planning to move forward, in particular to obtain fitness franchise financing.
Create a Business Plan
Before meeting with potential lenders, you will need to create a business plan for your fitness franchise. This plan will be helpful not only during the process of getting financing, but it will also continue to serve you as a source of reference long after your franchise is established and successfully operating.
Take the time to carefully read the Franchise Disclosure Document (FDD) that will be provided by the franchisor. Much of the information that can be used to draft your business plan can be found in the FDD. However, you will need to devote extra attention to the section of the plan that covers financials. Document your own financial history and how you plan to assemble financing to cover purchase of the franchise, including your own equity, personal loans and other sources of credit, in addition to the fitness franchise financing you are seeking.
Your business plan should also include financial projections for your franchise. Outline your startup costs, monthly operating expenses and income, and projected profit and loss. Monthly operating expenses can include rent, utilities, supplies, marketing and payroll. Consider future improvements to the business as well, which may be directed by the franchisor or specific to your location, such as new equipment, renovations and signage.
Identify Potential Lenders
Once you have a thorough and credible business plan, it is time to begin approaching lenders for fitness franchise financing. Investigate loans through banks and credit unions, which may have franchise lending programs already in place. You can also check out the Small Business Administration’s franchise loans. Look at loan terms, including repayment periods and interest rates. Having your business plan in hand will help you determine which terms are best suited to the financing needs of your franchise.
However, a business plan alone will not be enough to get you a loan. Your personal credit rating is a crucial factor in obtaining attractive loan terms. The size of your down payment and your personal financial statements will also play important roles. Consider bringing in a partner if your credit and financials may be an obstacle to financing.
Fitness franchise financing is available for those seeking to purchase a franchise, but the process to obtain it will take some upfront effort. The work that you do in advance of getting financing for your new franchise will pay dividends over many years of successful business operations.
