Simple answer – yes!
A lot of the high street banks prefer lending to franchisees rather than complete new start outs as it is a much safer bet for them. There is a lot less risk if people are buying into a brand that is already successful compared to someone setting up their own salon from scratch.
The statistics of a franchise succeeding in comparison to a new start up are quite something actually:
The Natwest figures back this up, indicating that over 90% of franchisees say that they are making a profit. In addition, less than 1% of franchises fail each year. In a sobering contrast, figures suggest that about 60% of non-franchise SME start-ups fail within five years.
Read more about it HERE on the Franchise UK site.
We have partnered with Natwest specifically as they are our bank, but also they love supporting the franchise industry. What this means is they have our Financial Information Memorandum (FIM for short) on their database, so have all of the approved facts and figures, plus budget sheets, business plans etc. They can see how our own salons are doing and some of our franchisees too and can make a lending decision based on all of this information. From a banks perspective, it reduces the risk to them in lending to you, so they can go up to 60% lending of your proposed total needed.
We would do a kick-arse business plan of course, and will always use actual figures (or modest forecasts as I hate to falsify figures because it’s just a disappointment to everyone) and that will all help you in securing the money you need to set up your business.