Financing remains a massive issue for prospective franchisees. In the short-term, there's no sign of this situation changing. Banks are cash-strapped and reluctant to loan to just anyone. In Washington, efforts to free up money to small businesses are not proving as successful as they should. At times like these, entrepreneurs, people who are already quite innovative, need to be even more inventive.
One of the most exciting innovations we've seen on the franchise financing front in years is Sprigster. Most people will at this stage be familiar with so-called 'crowdfunding' websites like Kickstarter. These sites were created mostly by artists and creative types who need large-scale funding for various expensive projects. The artist(s) will create a short video that explains what the project is and what it hopes to achieve and then webusers can choose to pledge some amount of money (no matter how large or small). Donors usually receive some sort payback and the whole concept rests on the idea that rather than wait around for the large-scale philanthropy of a few wealthy people, artists are wiser to pursue the small-scale philanthrophy of a wide net of impassioned fans. I have many friends in the arts community who've realised projects because of Jumpstarter that they never could have dreamed of before.
Luckily a few people in the franchising community sat up and took notice. Sprigster is a recently-launched crowdfunding website that allows users to provide funding for various franchise projects. Prospective franchisees, some of them military veterans, pitch their business projects to the public at large. They link their pitch to a particular franchise.
There's also a new 'Boost A Hero' campaign that was created specifically for getting veterans back into franchising.
"Sprigster's 'Boost a Hero' program is an innovative solution harnessing the power of social media and crowdfunding to accelerate veteran ownership of franchise businesses," said Stephen J. Caldeira, IFA President CEO in a press release. "As a sponsor of VetFran, Sprigster's Boost a Hero is helping to strengthen our industry and the U.S. economy as well as doing the right thing for our veterans and our nation."
For people ready to get into franchising, here's a great new tool for finding the funding you need.