don’t let financing scare you - franchise.orgt let financing... · don’t let financing scare...
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NOVEMBER 16-18, 2016
JW MARRIOT NEW ORLEANS
NEW ORLEANS, LA
More than 25 years of franchise industry experience
Director and board member for Swiss Farm Stores and Saxbys Coffee
Former multi-unit franchisee of Krispy Kreme Doughnuts for Pennsylvania, New Jersey and Delaware.
Currently serves on the Board of Directors for the International Franchise Association (IFA) and Chair of IFA’s Membership Committee.
Past Chairman for the Multi-Unit Franchise Conference, and Member and Board of Advisors for the Multi-Unit Franchise Conference.
President & CEO
Rocco Fiorentino, CFE
NOVEMBER 16-18, 2016
JW MARRIOT NEW ORLEANS
NEW ORLEANS, LA
35 years of banking experience, most of which has been in commercial lending
Bachelor’s degree, two master’s degrees, and doctorate degree while acquiring hands-on experience at Bank of America, Fleet Bank, Valley National Bank, and most recently at National Penn Bank
Very specialized concentration and expertise in the various Government Guaranteed loan programs including the SBA 7a, 504, SLA, Express and Micro loan programs
Chief Credit Officer David Grams
NOVEMBER 16-18, 2016
JW MARRIOT NEW ORLEANS
NEW ORLEANS, LA
Tot Squad began as an idea CEO and Founder Jennifer Beall Saxton had while in business school at the Kellogg School of Management at Northwestern University.
Originally founded in 2010 as CleanBeeBaby, LLC in Los Angeles, the company has been featured in national publications such as CNBC, Fast Company, Forbes, and Bloomberg BusinessWeek as an innovator to watch.
Rebranded in 2014 as Tot Squad, the business currently serves Los Angeles, Orange County, San Diego and New York City and opened franchise sales in 2015 with the expectation to fully expand nationally, and even, globally..
CEO and Founder Jennifer Beall Saxton
NOVEMBER 16-18, 2016
JW MARRIOT NEW ORLEANS
NEW ORLEANS, LA
Neal and Alexis Courtney became the franchisors of Cookie Cutters Haircuts for Kids in December 2014.
Courtney spent nine years holding several senior management positions including CEO and COO with Famous Brands International, the parent company of TCBY Yogurt and Mrs. Fields Cookies, helping to drive profitable sales in all segments of the business.
Prior to that, Courtney served in financial roles with PepsiCo and Kmart Corp.
CEO
Neal Courtney
NOVEMBER 16-18, 2016
JW MARRIOT NEW ORLEANS
NEW ORLEANS, LA
•Your website
•Your team / sales process
•Your discovery day
•Financing
How to attract more candidates?
NOVEMBER 16-18, 2016
JW MARRIOT NEW ORLEANS
NEW ORLEANS, LA
•SBA Registry
•SBA free affiliation review
•Bank Credit Report
•Brand executive summary/whitepaper
•FDD: Issues
•Item 7 - Item 19 - Item 20
•Business plan template
Is your brand ready for financial
review?
NOVEMBER 16-18, 2016
JW MARRIOT NEW ORLEANS
NEW ORLEANS, LA
•Where did they come from?
•How did it get there? Is it current?
•Is it a boilerplate or brand specific?
•Has it been pressure tested?
•Are working capital requirements sufficient?
Reset Your Net Worth Requirements
NOVEMBER 16-18, 2016
JW MARRIOT NEW ORLEANS
NEW ORLEANS, LA
•What are advantages and disadvantages of each?
•Cost - Time - Resources
•How does financing fit into your current sales
process?
Financing: In-House vs. Outsource
NOVEMBER 16-18, 2016
JW MARRIOT NEW ORLEANS
NEW ORLEANS, LA
LEARN ABOUT THE THREE MOST POWERFUL WORDS IN
FRANCHISE MARKETING
NOVEMBER 16-18, 2016
JW MARRIOT NEW ORLEANS
NEW ORLEANS, LA
•Partner with a funding source
•Proprietary Funding Programs
•Well Defined Processes
•Performance
Strategies for Success
NOVEMBER 16-18, 2016
JW MARRIOT NEW ORLEANS
NEW ORLEANS, LA
•Changes in SBA lending made to assist in franchise financing
•All loans under $350k are now processed as Small Business Loans
•Excess liquidity test has been removed
•New collateral requirements – removes “all available” (particularly
important for multi-units)
•SBA guarantee fee continues to be waived this year for loans
$150k and under
SBA Financing
NOVEMBER 16-18, 2016
JW MARRIOT NEW ORLEANS
NEW ORLEANS, LA
•Adequate Liquidity (pre and post closing)
•Sufficient Outside Income (ability to cover living expenses)
•Appropriate Transferable Skills
•Strong Credit Story
•Appropriate Collateral Resources
SBA Financing – 5 Steps to Success
NOVEMBER 16-18, 2016
JW MARRIOT NEW ORLEANS
NEW ORLEANS, LA
•Retain as much of your current liquidity as possible. (Liquidity Liquidity Liquidity)
•Make sure your initial projections are reasonable and achievable.
•Be willing to inject a larger percentage of the project costs into a second location
if the first has not yet reached sustained positive cash flow
•Be able to explain "why now" to the lender who wants to know why you want a
second location if the first is not yet profitable.
Multi-Unit Strategies
NOVEMBER 16-18, 2016
JW MARRIOT NEW ORLEANS
NEW ORLEANS, LA
•On target to hit your projections?
•Reached cash flow positive? If yes, have they sustained cash flow positive for 6 months?
•If "yes" to both - they may qualify for a business expansion loan with an equity injection of only 10% into
the new location.
•If "no" they may still qualify for funding with a higher injection if they are on target with their original
projections.
•Projected cash flow for the new location when combined with the existing cash flow from the current
location must provide adequate debt service ability for the total debt of all locations.
When is your Zee ready for
additional units?
NOVEMBER 16-18, 2016
JW MARRIOT NEW ORLEANS
NEW ORLEANS, LA
•Retirement Account Rollover for equity injection and/or self funding
•Provides ability to pay self a salary from the retirement plan and therefore
eliminate the need to include an owner's salary in the first year of projections for
the new business
•Demonstrates to the lender access to additional working capital to get the
business through the start-up phase if the business struggles early
•These have been strong selling points to lenders and a proven strategy to get
more deals approved
401(k) Rollover Funding
NOVEMBER 16-18, 2016
JW MARRIOT NEW ORLEANS
NEW ORLEANS, LA
Securities Backed Lines of Credit
•Fast & Flexible
•Cost of funds
Equipment Leasing
•When only equipment financing is needed
•Can be used in conjunction with above funding programs
for greater flexibility
Alternative Financing