Saturday, December 15, 2012

The Good News is, the Good News is Coming | Franchise Blog ...

According to franchise industry experts and surveys, the #1 concern for franchise investors these past several years has been financing. But what may seem scary news to the eyes of much of the economy, in fact, has an upside for those seeking start-up capital next year. As growing market uncertainty compels investors to move money out of an uncertain stock market and into safer vehicles (read, ?Bonds?) at the same time the Fed joins in the Bond-buying fray, the economy can?t help but react: As Bond rate rise, interest rates fall, and the availability of loan capital can be expected to improve in 2013.

On the flip-side of capital availability?i.e., on the franchise business side?is what Tasti D-Lite CEO Jim Amos calls ?innovative financing solutions.? As private equity and venture capitalists recognize the opportunity to pool resources and split risks, he sees ?an explosion of small- and medium-sized business lending? in the near future.

Much of this innovation can also be credited to the entrepreneurial drive of franchisors as well; and again, chalk it up to the lengthy recession. Four years of economic lag and lethargy have forced the franchise concept to refine itself, tighten its belt, and focus on its strengths over non-franchises business start-ups:

  • Simpler to get into?and for a wider demographic;
  • Simpler to open and operate?a proven system (including franchise manuals) already in hand;
  • Applicable to ever more business sectors and industries;
  • Adaptable to a changing culture?more mobile, more socially networked, busier;
  • Delegating roles between franchisors (who more and more are concentrating on branding, marketing, R&D and trend-influence vision) and franchisees (who then can focus their energies on operating the franchise).

As a result, parent companies have forged relationships also with lenders, fueling (and more attractively collateralized by) regional and national franchise success. Writes Matt Haller, IFA?s VP of Public Affairs:? ?Many franchisors have been working with lending institutions to develop credit facilities that were not available in years past to help provide funding for potential franchisees.?

The good news is, the good news is coming. As Michael Josephson wrote: ?Whether we want them or not, the New Year will bring new challenges; whether we seize them or not, the New Year will bring new opportunities.? And 2013 may just well be happy and prosperous for franchise borrowers.

Upside Group?s franchise business consultants are experts in franchise development. To learn more about franchising your business and the best strategies of financing, or to speak with an Upside Group professional representative, visit our website at http://www.upsidefranchiseconsulting.com/.

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Source: http://www.upsidefranchiseconsulting.com/blog/?p=971

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