There’s nothing quite like running your own business. If you’re drawn to becoming a franchisee, you’re not alone. According to Franchise UK, there are over 900 franchises and 48,000 franchise outlets in the UK, employing over 700,000 people.

Many see franchising as a lower-risk alternative to starting their own business from scratch, and it’s not hard to see why. When the British Franchise Association last surveyed the industry, they found that 93% of franchisees were profitable.

While working with an established brand has many benefits, there’s also a lot to consider, including how you’re going to source finance for setting up your franchise. To help those thinking of starting, already running, or expanding their own franchise, we’ve put together this article to explain what finance options are available.

How does owning a franchise work?

Franchises allow you to run a business using the name and assets of an established brand, such as a Burger King restaurant or a Best Western hotel.

Franchisees (i.e., you) would sign a contract and pay an initial investment to the franchisor (i.e., the brand you’ll be running), and then the business is yours to run.

As you are running the business, you’ll also be responsible for expenditure such as property, fit out, equipment, supplies, stock/produce, furniture, staffing costs, insurance, etc. Franchisees are also generally required to pay ongoing fees, which might be a set percentage of net turnover, to the franchisor.

Applicants generally must write a proposal and business plan that the franchisor must approve, but it can be a great way to start your own business. It comes with ready-made brand recognition and an established customer base. Many established franchises also provide some sort of support network beyond that brand name, such as marketing, training, technology, and IT and Accounting support.

What are the advantages and disadvantages of franchising?

Many people choose franchising because it comes with several built-in advantages that can lower the risk of failure. For a start, franchises come with brand credibility and awareness, and they’ll have their own marketing operations. Franchises also offer some level of support, such as training and consultancy to help you get your business off to the best possible start. This can be especially helpful if you don’t have much experience in your chosen industry.

There are also potential disadvantages to consider. You won’t have the same creative freedom that would come from owning your own business. Some franchises also require up-front investment (which can be considerable). You also won’t have the same financial freedom because you’ll have to share accounts with your chosen franchise, and they might decide not to renew your contract at the end of the initial term.

Ultimately, franchises give entrepreneurs the opportunity to run their own businesses with the strong backing of an established brand. It’s often just down to how much control you want over your business that dictates if a franchise is the best route for you.

What are some examples of franchises?

Some of the top UK franchises include:

Fast food restaurants such as McDonald’s, Pizza Hut and KFC
Retailers such as Swarovski, CeX and Cartridge World
Coffeehouses such as Esquires Coffee and Dunkin’ Donuts
Gyms such as the Little Gym, Anytime Fitness and 9Round
Hotels such as Hilton, easyHotel and Travelodge
Carehomes such as Clarity Home Care and Radfield Home Care
Cleaners such as ServiceMaster and Molly Maid
Leisure providers such as Launch Trampoline Park and Urban Air Adventure Park
Educators such as First Class Learning and Mathnasium

What is Franchise Finance?

Franchise finance is the term used for financial solutions that are specific to the needs of business owners who are looking to source funds for running a franchise. For example, many franchises might have seasonal peaks in trade and repayment terms can reflect this with higher repayments for peak periods and lower payments during the offseason.

Franchise finance can cover:

Franchise fees: Franchisors will often require an up-front investment as part of the agreement.
Equipment fees: You can fund any type of equipment purchase that you can think of, depending on the type of franchise you’re running. This could cover till machines and software, cleaning equipment, coffee machines, treadmills and ovens. Essentially, anything that you’ll need for running your day-to-day operations can likely be funded.
Fit out finance: You’ll need to make your property look the part! Fit out finance covers tangible items such as shelving, desks, tables as well as intangibles such as flooring, partitioning, decorating and branded collateral such as logos, pictures and lighting.
Working capital: Working capital gives businesses space to comfortably cover staffing costs, utility bills as well as stock ordering. This can be especially useful in the first few months of a new business when you’re still building up your regular cashflow.

Can I get funding to buy a franchise?

Generally yes. Many franchises will allow you to use financing to buy a franchise, but it’s best to check with the specific organisation as they may request unencumbered funds for the initial investment. Even if this is the case, financing can still be used to support starting a franchise to provide equipment, working capital or other expenditures.

Why use Origin Finance?

At Origin Finance we have worked with the leading Franchises in the UK. As business finance, franchises yield great rewards, but there is a big investment before you get set up.

We’ve worked in many franchise industries such as Gyms, Coffee shops, Retail stores, Fast Food restaurants and Family Entertainment centres to provide complete finance packages.
We’re passionate about helping entrepreneurs succeed in their ambitions.

When you partner with us, you’ll be working with a human (not an algorithm) who’ll take the time to understand your business so that they can connect you with the most suitable lender for your needs. We have access to over 120 lenders, many of whom only deal with brokers like us.

Get in touch for a free, no-obligation quote to learn how we can help you fund your franchise.

Asset Finance helps businesses to launch, update and grow by helping them to purchase or lease equipment, machinery, or other essential business items through a regular payment plan. It can often be a critical part of a business’ expansion plans or simply used to replace old, worn-out, or outdated equipment. Asset Finance can even be used for new businesses looking to open their doors for the first time.

Asset Finance Explained

Asset Finance is often misunderstood, with people thinking it can only be used for common purchases like IT equipment or vehicles.

A good way to think of what Asset Finance can be used for is to imagine yourself standing in a completely empty space, and visualise an office being constructed around you. The groundworks, flooring, roofing, plastering, painting, desks, chairs, bins, laptops and monitors, microwaves, kettles, fridges, coffee machines, branded signage, phones, printers, printing paper, plants, clocks, wi-fi router, servers, notebooks, pens…they can all be purchased through Asset Finance.

Now imagine this for a shop, garage, broadcast studio or building site and you’ll quickly start to realise just how broad Asset Finance can be as a funding solution. You can buy or lease almost anything you can think of.In this article, we explain what Asset Finance is, who is eligible, what the advantages are, and how it works to help clear up any confusion around this versatile finance product.

What is Asset Finance?

Asset Finance is a type of business finance that helps you to purchase or lease items for your business, such as computers, furniture, software, cars, etc. Generally, it will cover any type of machinery, fixture, fitting, or equipment that you can think of (in fact, it’s also often called equipment finance).

There are several products that cover Asset Finance including hire purchase, finance lease or operating lease. With asset finance, the asset itself is used as security for the finance.

Can I use Asset Finance to buy second-hand equipment

Asset finance doesn’t just apply to new assets. You can use the finance to help you purchase used or refurbished equipment, which can be a useful option if you’re looking to reduce costs or make your budget go a bit further.

What are some examples of what Asset Finance can be used for?

Asset Finance can be used for a great many things, but some examples include:

Retail interior fitouts such as new flooring, shelving, and signage
Manufacturing plant machinery and equipment
Marketing IT equipment and software licences
Office furniture and fittings such as desks and chairs
Gym equipment for fitness centres such as weights and treadmills
Logistics vehicles such as lorries and vans
Hotel amenities such as bedding, furniture and kitchen equipment
Agricultural machinery such as tractors and combine harvesters
Brewing equipment such as fermenting vessels, kettles and tanks
Printing Large format printers, presses and machinery for publishers
Construction equipment such as scaffolding, excavators and forklift trucks

Any associated costs can also be included. For example, if you were fitting out a shop, all costs for labour, decorating and building works would be included. Similarly, if you bought a new machine for a factory, any costs for installation and configuration can also be funded. Asset Finance is also not just for tangible assets. It can also be used for intangibles such as websites, patents, copyrights, logos and other branding collateral (essentially, anything that you can’t touch but still does have a cash value).

Who is eligible for Asset Finance?

You can be either a freelancer or a registered company and still be eligible to apply for Asset Finance. You’ll have to be based in the UK (England, Scotland, Wales & Northern Ireland).

It doesn’t necessarily matter how long you’ve been trading. Whether you’re a fresh startup or an established business, there are likely options available for Asset Finance. In fact, it’s often best to plan ahead before making purchases to make sure that you don’t miss out on any finance opportunities.

Why use Asset Finance?

The advantage of Asset Finance is that it provides a useful amount of flexibility for businesses. Firstly, because it’s so versatile in terms of what it can fund (we’ve found funding for items as unusual as AstroTurf and car wash jets).

Secondly, it allows you to purchase potentially expensive equipment without committing a large amount of capital upfront. Instead, you’ll be able to start using your assets straight away and manage your cashflow with payments that are spread out over time. These payments are manageable because they’re fixed, meaning they won’t suffer from inflation and interest rate rises. If you operate seasonally, we’re able to organise higher repayments during peak periods and lower payments during the troughs.

Finally, Asset Finance allows you to buy exactly what you want to buy or lease. You can choose your own supplier, and we’ll be able to mirror their payment terms, including stage payments and advanced payments.

What is the minimum amount I can borrow for Asset Finance?

The minimum amount that we can finance is £10,000. This doesn’t have to be for just one expensive asset; it can finance the purchase of several assets as part of a larger project.

How Origin Finance can help

Whatever you’re looking to fund, no matter the sector you work in, we’ve got you covered.

We’ve helped hundreds of businesses with their finance needs and will be able to put together a solution that’s bespoke to your needs.

Our Asset Finance team will work with you to understand your business, your growth plans and any challenges that you’re facing. We work with an extensive financial market, giving you access to commercial lenders who will only accept broker introduced applications. What’s more, we don’t charge any fees for our services as we are directly remunerated by the lenders.

Get in touch for a free, no-obligation quote to find out how we can help your business.

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