You may be interested in a franchise purchase, but do not want to make a loan in order to raise the capital. There are other ways of raising capital; perhaps one of these can work for you.
- Use of Inheritance or Gift
If you have received or know for sure that you will be receiving an inheritance or a sum of money that is being designated as a "gift", you can use that. However, you should make every effort to ensure that the money will be there when you need it for the franchise purchase, to avoid an embarrassing or even illegal situation.
There may also be tax legalities involved, that could result in a reduction of the expected amount. You will need to have a very firm idea of exactly how much money you will actually receive, again before it is needed for the franchise purchase.
- A Partnership-Either Active or "Silent"
Often, entering into a partnership can provide the needed capital. This may be one option available to you.
Partnerships can be either active or "silent". An active partnership means that the person or persons with whom you are becoming partners will take an active, "hands-on" role in the franchise. If the partnership is "silent", the partner(s) name(s) may appear on all legal documents, but there is no active involvement in the operation of the franchise.
A partnership can be formed with family, friend, or even a trusted acquaintance. If you choose a family member, you should consider that everyone in the family, or at least more than you would expect, will know or have access to information, both public and confidential, concerning the franchise.
Also, if you choose a family member, and something negative occurs, this can have an effect on personal relationships. People may say they won’t choose sides, but inevitably that will occur to some extent.
When a friend becomes a partner, family problems are definitely eliminated; however, the friendship takes on a new tone. You may actually discover that the differences between you and your friend when he was just a friend have an impact on how the business is being run. This can lead to problems which, although connected to the business, can also spill over into the personal friendship.
An acquaintance whom you trust may sound like the best way to go, and it may be. However, because he is an acquaintance, you will want to ask for references and ask him to disclose at least to some extent his financial situation. Additionally, you may also want to run a background check.
- Grants or Other Similar Help
Sometimes those officials and others who are trying to make improvements or attract business to a specific area will provide some or all of the capital, or will match existing capital. Similarly, grants can sometimes be awarded for same reasons as listed above, as well as other reasons.
Comments
Post has no comments.