The hidden realities in franchise financing


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From Canada One. There are many myths and misunderstandings surrounding franchising. None, however, are as pervasive and as dangerous as those dealing with financing.

It is certainly important to the franchisor to "get a handle" on franchise financing issues, but it is equally important for the franchisees who buy the franchises, the landlords who rent space to the franchisor and the franchisees,

the bankers who lend money to both, the suppliers to the system, purchasers of existing franchises and entire systems, and the stock analysts and investors who have to make some determination about the future prospects of public franchisors.

The first cold reality which confronts the new franchisor or the franchisor borrowing for the first time, is that there are no "hard" assets in most franchise systems

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