Funding is the biggest issue of entrepreneurs looking to break into franchising. This is an old issue, but some interesting data has surfaced which reveals which franchises are getting the most funding.
On the back of Boefly's stats which indicate that banks now think that franchises are safer businesses to loan than independently-run businesses comes news that restaurant franchises receive more funding than any other franchise group. This is clear evidence that the banking sector consider food franchises to be one of the safest businesses to invest in.
The Coleman Report, a newsletter that charts SBA funding, as the Restaurant Franchise Monitor reports, "found that SBA loans made to restaurant franchises are less likely to fail than are loans to independents".
The breakdown is as follows: since 2000, 21% of businesses to receive SBA funding have failed, while only 19% of restaurant franchises have failed. Given the competitiveness of the restaurant sector, this is a pretty interesting statistic.
I'd also like to highlight their main talking point from their analysis of these figures:
"The lesson here? If you want to start a restaurant, you want a loan and you don't want to fail, you might be better off picking a franchise. Assuming you pick the right franchise, that is."
Of course, the real challenge is finding the right franchises. Franchise Direct has (more than a) few solid food franchises.