As regular readers of our blog will know, joining the franchising industry remains a good financial option despite the cost-of-living crisis. But there's no getting away from the fact that some people who want to become franchisees simply can't afford to do so right now.
If you fall into that category, what options are available to you? We take a fresh look.
Angel investors
A term originally used to describe the wealthy patrons that funded Broadway shows, today angel investors provide capital across almost every industry. Put simply, they are wealthy people looking to invest in businesses that will earn them a profit.
Angel investors could invest anything from £1 up to hundreds of thousands - or even higher - so there's a good chance that there's one looking to invest the sort of amount you're after, whatever the figure.
To secure funding from professional angel investors, you'll need a solid business plan and an intricate knowledge of your business that you can explain in simple terms to someone who may have no prior knowledge of the franchising industry. Of course, you'll also need to be comfortable and confident discussing the numbers - how much investment you're hoping for, what your predicted turnover is and how that translates to profitability.
Fortunately, preparing a solid business plan is relatively straightforward when the business is a demonstrably profitable franchise with an already-established reputation but don't be fooled - preparation is key as you'll need to impress any potential investors, who might also be considering investing in numerous other businesses.
If you're interested in becoming a franchisee and think an angel investor would help you achieve your dream, you can find out more information here.
Crowdfunding
Crowdfunding provides a platform for anyone to pitch an idea and anyone to invest in it.
Although successful pitches may result in a handful of investors investing large sums, most typically see several investors contributing a relatively small amount. For example, in America, a new smoothie company recently raised more than $1mil with approximately 5,000 investors all investing around $100 each.
Anyone interested in crowdfunding should remember that if the campaign fails to meet a minimum investment, all funds are returned to investors, so would-be franchisees need a plan to market their fundraising campaign as heavily as possible.
If this sounds like a route you're interested in exploring, check out Shopify's list of the 10 best crowdfunding websites here.
Friends and family
Quite possibly the oldest, easiest and most reliable method of securing funding for a franchise opportunity is turning to the bank of mum and dad, so if you have family and friends with enough savings to help you get your franchise off the ground, don't hesitate to ask them.
The worst case scenario is they say no. But if they can afford to help out and are looking for an investment opportunity, the fact that they know and, hopefully, believe in you could help you raise the capital you need quicker than you imagined.
Cafe2U - the franchise for you
If you're interested in investing in a Cafe2U franchise, click here for more information. We can assist in arranging finance and your personal investment can be as low as £15,000 subject to status.