Nearly everyone who embarks upon the process of buying a franchise will need to obtain financing to make their dreams a reality. Fitness franchises have become an especially popular choice for business entrepreneurs, so it is important to understand how to secure fitness franchise financing before moving forward.
Step 1: Choose a Franchise
The first step is to evaluate available fitness franchises and decide which one could be the right fit for you. Look at the mission, offerings and environment of several options to see where you feel most comfortable. This is a place where you will be spending a great deal of time, so your franchise should be one that is in line with your values and interests. Keep in mind that lenders are more inclined to approve fitness franchise financing for a franchise that has a good reputation among clients and is known for strong cash flow.
Step 2: Make a Business Plan
A thoroughly considered and documented business plan is also essential for financing approval. Lenders will expect to see a clear plan for how you will start and operate your franchise, including detailed descriptions of the services you will provide, how you will market your franchise, and your anticipated income and expenses.
Some of the information that you will need for your business plan can be found in the Franchise Disclosure Document that you will receive from your chosen franchise. Being a franchisee means that some business decisions are already made for you, as they are determined by the franchisor. However, much of the most important information that you should include in your business plan will be your financial projections. In short, lenders will want to know how you plan to use your fitness franchise financing to ensure that your franchise will be profitable and you will be able to repay the loan.
Step 3: Meet With Lenders
After you have completed your business plan, consider what lending sources you will approach for financing. Loans may be available via commercial banks, credit unions and the Small Business Administration. Each of these sources will need to examine your personal financial statements, your tax returns and your credit rating in order to determine your eligibility for financing. This information will also help lenders decide what sort of loan terms they can offer you.
Fitness franchise financing will almost certainly be necessary to move forward with your plans to purchase a franchise. Therefore it is key to do some upfront research and planning to be sure that you are prepared to get the amount of financing you need with the best terms you can.