Franchising works when an individual or group (The Franchisee) establishes a relationship with a business (The Franchisor) to help grow and distribute its product or services. The Franchisee pays a Franchise fee to use the Franchisor’s business model and leverage its recognized brand name. A Franchisee typically gets a quicker return on their investment than a start-up.
What is Franchising
Franchising can be an exciting new venture for the first-time business owner. Whether you’re looking to Franchise to achieve the desired lifestyle of hands-on business ownership, or simply a new investment opportunity, proper funding is the key to long-term success and profitability. Funding your Franchise business with the most optimal financing opportunity based on your personal goals, background, and current finances can help you avoid the mistakes and pitfalls that inexperienced investors may encounter.
Financial Investment
NET WORTH
$2M
LIQUID CAPITAL
$500K
START UP COST
$1.5M – $1.7M
FRANCHISEE FEE
$29K
ROYALTY FEE
5%
MRKTG BRAND/ FUND
2%
Retro Fitness Supporting Veterans Across America
Along with providing initial financing options and support, Retro Fitness also offers special discounts for Military Veterans. Retro Fitness is honoring Veterans this year by waving the $29,000 Franchise fee for qualified U.S. Veterans.
Retro Fitness is proud to support and contribute to this growth in Veteran-owned businesses. First-time buyers of a new Retro Fitness who are Veterans and commit to developing a new traditional club are eligible to receive a waiver of their Franchise fee and 50% off their royalties in year one to help them get started. Learn more about our Veteran Franchise opportunities.
Financing Options Explained
If you’re just starting the process of finding a Franchise to invest in, you may have questions about the financing options available to you. Here’s a quick breakdown of the financing options.
SBA LOAN
A small business loan that is partially guaranteed by the government through the Small Business Administration (SBA). SBA loans eliminate some of the risks for the financial institution issuing the loan. The SBA doesn’t issue the loan, they work with a network of approved financial institutions that frequently work with small businesses. Since the SBA partially guarantees the loans, the financial institution can offer small businesses better terms. Typical terms are a 10 payment schedule, no prepayment penalties and lower rates than conventional banking. SBA typically requires a down payment of 10-25% based on credit worthiness, and then they fund the balance of the entire project, including working capital. Not all franchises are approved for SBA financing. Retro Fitness is approved.
Conventional Banks
In most cases, this option would be if you have an existing relationship with a bank and they are interested in underwriting your project. Downside is that the interest rates are typically higher.
Equipment Financing
Some franchisees prefer to pay for the buildout of a club and finance the equipment. We have access to many equipment lenders that can help at prevailing rates.
