Finding the Best Bar Franchise Financing Options
Becoming a sports bar and grill franchise owner and creating a growing business where people love to gather and enjoy good company and great food can be an appealing thought. It takes understanding how the different bar franchise financing options work to help a prospective owner realize that dream.
There are several bar franchise financing options available to people interested in becoming an owner, some including commercial bank financing and non-traditional options, such as borrowing from family.
It’s worth digging into the facts and getting to know them to learn which one might be right for your situation.
1. Traditional Loan Through a Commercial Bank
Once the owner has determined the bar franchise cost and is ready to proceed, they can start thinking seriously about their bar franchise financing options. For many people, the quickest and most accessible route to fund their bar is a commercial bank loan.
The traditional bank loan can offer a few advantages to a future owner. It’s a well-understood and accepted model, can be completed over a relatively short time frame, and can give approved franchise owners a lump sum at a negotiated interest rate to get their business up and running.
How’s Your Financial Health and History?
A commercial bank wants to ensure that any business loans it makes are a reasonable risk so it can be confident of repayment. A potential owner considering bar franchise financing options and opting for a bank loan should understand this and be prepared for scrutiny.
The future franchise owner can expect the bank to examine their credit history and business plan, and the bank might also require a certain level of net worth to approve the loan. Higher creditworthiness can result in more favorable interest rates and terms.
2. Other Bar Franchise Financing Options
Bank loans are just the tip of the iceberg when looking for the best franchise financing choice. Today, plenty of ways exist to get the needed funds without dealing with commercial lenders or bureaucracy.
If the potential owner is in a positive financial position, they might consider self-financing the franchise to avoid the matter altogether. Opting for this route can reduce franchise costs by eliminating a regular payment obligation and would avoid having to cover interest on a loan.
Another option might be teaming up with family or acquaintances to create a pool of resources. This method has many variations, from partnering in business with the lenders to offering benefits to appealing repayment arrangements.
When in Doubt, Consult the Franchise Support Team
When it comes to understanding what’s involved in financing a bar franchise, the brand itself might be an excellent resource to aid the future owner. Reach out to the franchise for valuable tips and information on where to turn and which financing method might be suitable.
3. Before Considering Bar Franchise Financing Options, Evaluate the Brand
Franchises are like fingerprints — no two are the same. Each has its own character, business model, and approach to the industry, and those variations can significantly affect overall startup and running costs.
For a person looking at bar franchise financing options, it’s essential to get familiar with how each brand works to set their expectations on cost and give them an understanding of what to expect along the way. Examine their franchise disclosure documents, which should lay out financial obligations for the franchise and owner.
Franchise Location Can Change Everything
There are other factors beyond the franchise model that can impact cost. The location where the owner plans to set up their bar can be a considerable factor in the expenses associated with real estate, build-out, inventory, and more.
Look at the city where you intend to operate. Does the brand have any other locations there, and if so, what kind of costs do they have? Check out other bars in the area to get a general idea of the level of financing needed to get started and remain solvent.
Get Details on Bar Franchise Financing Options with Hotshots!
Hotshots Sports Bar and Grill wants our owners to hit the ground running a bar, and we’ve developed our financial model with their needs in mind. We offer guidance throughout the onboarding and financing process to ensure that every owner gets taken care of and is prepared on how to open a bar and build one for modern operations.
Want to find out more information on financing your future with Hotshots? Let’s start a conversation today!
