Franchise finance
Franchise finance: funding to buy into, open or grow a franchise
Funding a franchise isn’t one kind of borrowing. Paying a franchise fee for a brand-new site, opening a third unit, fitting out premises and buying a franchise business that already trades are different situations, and lenders look at each one differently. This page shows which kind of finance usually fits each situation and what lenders tend to look at, so you can approach the right route with the right preparation.
Already running a franchise and planning what’s next? Wize Finance starts with one short check about your business and what the funding is for.
Say whether you're buying into a franchise or growing an existing one, plus the amount. The team reviews your enquiry and discusses routes that may fit.
Which kind of finance fits your franchise situation?
Four common situations and where each one usually leads.
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You’re buying into a franchise and aren’t trading yet.
Situation 1: New franchise
- Usually involves
- your own contribution alongside startup-stage borrowing, and sometimes a government-backed Start Up Loan or asset finance for kit.
- Where to go
- startup business loans · government business loans
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You already run a franchise.
Situation 2: Extra unit or growth
- Usually involves
- a business loan, asset finance for fit-out and equipment, or working capital.
- Where to go
- Start your enquiry ↓
Where Wize Finance can help
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The unit already trades.
Situation 3: Buying an existing franchise business
- Usually involves
- acquisition finance, assessed on the business’s own trading record.
- Where to go
- Acquisition Finance
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Situation 4: Equipment, fit-out or premises
- Usually involves
- asset or equipment finance, or commercial property finance.
- Where to go
- Asset finance · Equipment finance · Commercial property finance
Already running a franchise, or funding equipment, fit-out or premises? Start an enquiry and the Wize Finance team will discuss it with you. Buying into your first franchise? Start with the startup and government-backed routes in the map.
Start your enquiryBuying into a new franchise
When you buy into a franchise, you’re paying for the right to trade under an established brand and system, plus the cost of getting your unit open. The money typically needs to cover some or all of:
- the initial franchise fee
- premises costs, such as a lease deposit and legal fees
- fit-out, signage and equipment
- opening stock
- working capital to carry you until the unit is trading steadily.
Why lenders treat this as early-stage lending
Your franchise business doesn’t have a trading record yet. A lender will look at the franchise system as part of its assessment, but the decision still rests on your application: your business plan and cash-flow projections, your own contribution, your experience and your personal credit history. Joining a franchise doesn’t guarantee finance, and it doesn’t replace that assessment.
Where to look
- For a clear view of the funding routes available when you’re just starting out, see our guide to startup business loans
- For how the government-backed Start Up Loans scheme works, see our guide to government business loans
- Some franchisors can tell you which lenders their franchisees have used. Ask yours what support it offers.
Opening another unit or growing an existing franchise
If you already run a franchise, you’re in a different position. You have a trading record, real figures and a working relationship with your franchisor, and lenders can look at all of these.
Common reasons franchise operators look for finance:
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Opening an additional unit or territory: fees, fit-out and the costs of getting a new site trading.
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Refits and upgrades: brand refresh requirements, new equipment or remodelling.
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Working capital: stock, staffing ahead of a busy season, or evening out cash flow across several sites.
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Replacing equipment or vehicles as your operation grows.
What lenders tend to look at here
Your existing units’ trading performance and bank statements; the plan and projections for the new site; your current borrowing and how comfortably it’s being repaid; whether the franchisor has approved the expansion; and, where relevant, security or guarantees. Every lender weighs these differently.
If your franchise business is already trading, you can start with one short check. We’ll look at what the funding is for and whether it could suit any of the funding partners we work with.
Start your enquiryRelated finance for operators: Working capital loans · Business line of credit
Funding equipment, fit-out and premises
When the main cost is a physical asset, finance built around that asset is often the more natural fit than a general loan.
Each of these has its own page explaining how it works, with its costs and terms.
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Asset finance: spreads the cost of equipment, technology or vehicles, with the asset itself central to the agreement.
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**Equipment finance**: for kitchens, machinery, tools and other operating kit.
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Commercial property finance: if you’re buying a site rather than leasing one.
Buying a franchise business that’s already trading
Buying an existing franchise unit (often called a franchise resale) is different from buying into a new franchise. You’re buying a business that already exists, with its own accounts, staff, lease and customers, and the franchisor will usually need to approve the transfer.
Finance for this is usually acquisition finance. Lenders focus on the business’s own trading history, the price you’re paying and how the purchase is structured.
A simple rule of thumb: if most of the money pays for a business that’s already trading, it’s an acquisition. If most of it pays for a franchise fee and setting up a new site, it’s a franchise buy-in.
For finance to buy an existing business, see our Acquisition Finance hub.
What lenders usually look at for franchise finance
Every lender sets its own criteria, but franchise applications commonly involve:
None of these is a pass mark, and being part of a franchise doesn’t change the fact that lenders assess each applicant individually.
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The franchise system: how established the model is and what support the franchisor provides.
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You: your relevant experience, your personal credit history and, if you already trade, your track record.
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Your plan: a business plan with realistic cash-flow projections for the unit.
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The costs: a clear breakdown of what the funding will pay for.
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Your own contribution: lenders usually expect you to put some of your own money in. How much varies by lender and situation.
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Existing trading: for current operators, accounts and bank statements.
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Security and guarantees: some lenders may ask for these, depending on the amount and the risk. What a personal guarantee involves is worth understanding before you apply.
Getting ready to apply
Lenders commonly ask to see:
It’s sensible to read the franchise agreement carefully and take independent legal and financial advice before you commit.
How Wize Finance helps franchise operators
Planning your next unit is demanding enough without approaching lender after lender. Wize Finance aims to make the first step simpler for franchise businesses that are already trading.
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Tell us about your business:
one short check covering your company and what the funding is for.
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We look at the fit:
whether your plans could suit any of the funding partners we work with.
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Introduction where it makes sense:
if there’s a realistic route, we introduce you. If there isn’t, we’ll say so.
Any offer, its terms and the decision always come from the lender.
Franchise finance: common questions
Can I get a business loan for a franchise?
Often, yes. Franchisees use business loans, asset finance and other funding, but every application is assessed on its own merits. Which kind of finance fits depends on whether you’re buying in, expanding, funding equipment or buying an existing franchise business.
How are franchises usually financed?
Usually through a mix: your own contribution, a business loan, and asset or equipment finance for fit-out and kit. Some new franchisees also look at the government-backed Start Up Loans scheme, which is a personal loan. See our government business loans guide.
How much do I need to put in myself?
Lenders usually expect a meaningful personal contribution, but the amount varies by lender, by franchise and by situation. There’s no single figure that applies everywhere.
Does joining a well-known franchise make it easier to get finance?
Being part of a franchise doesn’t guarantee finance or give you preferred access. A lender will look at the franchise system as one part of its assessment, but it still assesses you, your plan and your finances individually.
Can I get finance for a franchise if I haven’t started trading?
Some funding is designed for people at the very start, but it works differently from lending to an established business. Our guide to startup business loans explains the options.
Is buying an existing franchise different from buying a new one?
Yes. Buying a franchise business that already trades is usually acquisition finance, assessed on that business’s trading record. Buying into a new franchise is funding a new unit from scratch.
Will I need a personal guarantee?
It depends on the lender, the amount and the situation. Our guide to business loans without a personal guarantee explains what a guarantee involves.
Planning your next franchise move?
If you already run a franchise and you’re planning another unit, a refit or extra working capital, start with one short check and get a clearer view of your options.