Congratulations on your new business or expanding your existing business! Franchises are a great way to be your own boss without having to “recreate the wheel” as they say. There are close to one million franchise companies in the US which employ over ten million people. Many entrepreneurs go this route because the franchise has an established name, proven business model and good training for the franchise owners.
You’re approved, now what?
You’ve been approved for the franchise you want in the geographical area you’re interested in working. The next step is usually finding a physical location and outfitting it with what you need to meet the requirements of the franchise. Depending on the type of franchise you have, your needs will differ and the costs will differ. Franchises generally fall into three main categories; quick serve restaurants, business services, and personal services. Nearly every franchise has an equipment leasing service that they work with or recommend there are advantages and disadvantages of working with their financing company.
If this is your first time owning a business and you’ve used a significant portion of your assets to become a franchise owner, using the recommended equipment financing company may be in your best interest. The reasons are because they already know just about all of your financial background, business experience, and they understand the equipment being leased. Because they know the exact hardware and software required, they often don’t need as much filled out by you, the franchisee, because they will contact the supplier and have them complete the serial numbers and other information on your behalf. However, they may charge you a higher rate and they may over sell you on what you need to get started, both of which will cost you more in the long run.
Before you begin working with a third party equipment leasing company, check to make sure it is allowed by your franchise. If you are permitted to go elsewhere, be prepared to do a little more work. You will have to resubmit a significant amount of your financial information and you will need to have the costs, model, and serial numbers of all hardware you’re looking to lease as that will be required. However, with the added work, there is reward. In the long run you may have more flexibility in adding to your existing lease if needed and often you have more competitive rates.
If you’re looking into leasing equipment for your franchise, contact eLease with what you need and we will be happy to evaluate your situation and work with you throughout the process. We work with franchises regularly and would love to see how we can help you. Call us at 800-499-2577.