Minorities who dream of buying a franchise often encounter obstacles on the way to reaching their goal. Some have simple answers; some require coursework. Some, especially those of the monetary variety, take real resolve to overcome. How do you really get franchise financing? Even in these toughest financial cases, minorities do have resources to help them out:
- Minorities in Franchising Committee, created by the International Franchise Association, brings together prospective minority franchisees, franchisors and lenders through seminars, education, recruitment programs and funding resources.
- The Minority Business Development Agency (MBDA) is an organization under the umbrella of the U.S. Department of Commerce committed to empowering minority businesses for the purpose of wealth creation in minority communities. In February 2002, the IFA and MBDA signed an alliance to promote minority franchise ownership through the use of joint resources.
- The 504 Certified Development Company (CDC) Program is a nonprofit organization licensed by the SBA to make loans to small and midsized businesses that need financing for industrial or commercial buildings, equipment and machinery. The 504 Program can't be used for working capital or inventory, consolidating or repaying debt, or refinancing. There are roughly 270 CDCs nationwide; check here for the CDC nearest you.
- CommunityExpress, a pilot SBA loan program developed with the National Community Reinvestment Coalition, focuses primarily on low- and moderate-income areas with maximum loan amounts of $250,000. This program also includes technical and managerial assistance. And staying true to the program's name, loans are centrally processed in Sacramento within 36 hours.
- Franchising Basics: The Official IFA Course is a free introductory course worth 300 Institute of Certified Franchise Executives (ICFE) credits. It's designed to help franchise-seekers understand and evaluate Uniform Franchise Offering Circulars. The course covers how franchises work, the laws and regulations that apply to franchising, the advantages and disadvantages of franchising, plus additional information.
- The FTC provides guides, online pamphlets, consumer warnings, plus an array of other materials for prospective franchisees.
|Would You Like Fries With That?|
|$1,000 The least
expensive franchise in the 2003 Franchise 500Â®|
$259,000* The average cost of buying a franchise
$438,000 What you can expect to pay for a fast-food franchise
$50 million The most expensive franchise in the 2003 Franchise 500Â®
Source: Entrepreneur's Franchise