When it comes to financing the purchase of a franchise, many candidates do not have a full picture of the options available to them. What lending paths are most common? What do lenders look for? What should candidates prepare before applying?
To help answer those questions, True North Restoration and lending partners can work together to give candidates a clearer understanding of the franchise financing landscape. Below is a high-level overview of franchise financing and some of the most common considerations.
They start looking for businesses with predictable demand, essential services, and a model that holds up when the economy tightens. That is where restoration consistently enters the conversation.
The amount a candidate needs to finance is important, as some lenders prefer larger loan amounts and may have minimum thresholds for the deals they are willing to underwrite. Most banks prefer to write loans for a minimum of $150K. Although there are other options, there are fewer and fewer banks willing to underwrite loans under this amount.
In addition to the total investment, lenders will typically look at a candidate’s available liquid capital, overall net worth, credit profile, and ability to support the business through launch and early ramp-up.
True North Restoration’s financial requirements and estimated startup investment are outlined in the Franchise Disclosure Document (FDD). At the appropriate time, candidates should review those numbers carefully and be prepared to discuss how they plan to fund both the initial investment and any additional working capital needed along the way. Most importantly for you to know, True North Restoration requires a minimum liquidity of $80K and total net worth of $250K.
Franchise Fee
Like any franchise opportunity, investing in a True North Restoration franchise includes several categories of costs. These generally include the initial franchise fee, ongoing royalties, startup expenses, and working capital to support the business as it ramps up.
Royalties
Also referred to as the initial franchise fee, this is the one-time payment that gives a franchisee the right to operate under the True North Restoration brand and use its systems, trademarks, and intellectual property. The franchise fee is disclosed in the FDD and is typically due upon execution of the franchise agreement.
Startup Costs
Startup costs can include items such as building lease and improvements, office equipment, office supplies, office furnishings, vehicle(s), computer hardware and software, opening inventory, initial equipment package, and more. Most franchisors refer to this as the “initial investment,” which includes the franchise fee. The exact investment will vary based on market, territory, operating model, and local business needs.
Working Capital
In addition to startup costs, candidates should plan for working capital to support operations in the early months of the business. This can be especially important as the business builds local relationships, establishes referral channels, and ramps toward steady revenue.
It is common for franchise candidates to explore outside funding to complete their investment. There are several financing routes worth considering, and the right option will depend on the candidate’s financial picture, goals, and risk tolerance.
Some of the most common options include:
When preparing to pursue financing for a True North Restoration franchise, candidates should be ready to provide documentation such as:
A thoughtful, realistic business plan is especially important. Lenders want to see that a candidate understands the opportunity, the local market, the startup costs, and the path to building a sustainable business.
Candidates should make sure their projections are grounded in reality and supported by the territory they are pursuing. The stronger and more detailed the preparation, the better positioned they will be in the financing process.
Franchise financing can feel overwhelming at first, but many candidates are surprised by the number of available options once they begin the process. The key is preparation: understand the investment, know your financial position, and explore funding paths early.
True North Restoration works with candidates throughout the discovery process to help them better understand the business model, investment range, and what financial readiness looks like as they evaluate ownership.
To provide additional context, we work with experienced franchise financing partners like FranFund who specialize in helping candidates navigate the funding process.
“Franchise financing is not simply about finding capital. It is about identifying the right mix of funding options based on a candidate’s goals, available resources, and long-term plan for the business. FranFund helps franchise candidates understand those options and develop a strategy designed to support a successful launch.” – Eric Schechterman, Director of Sales FranFund
