myke
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Registered: 7th Feb 01
Location: High Wycombe, Buckinghamshire
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Not quite happy at work at the moment, and just running a few ideas through my head.
Say there was a franchise that i'd be interested to buy into, but required a 25K upfront commitment to equip and stock. I have no savings, and would struggle to borrow from a friendly source.
Will a bank give a business loan for this type of thing?
Would it then be secured against the kit your getting with the franchise, or would you have to secure it against anpother asset, your house for example.
Just a thought at the moment. Not quite ready to start asking potential lenders yet, and haven't even researched about time frame until returns or possible income just yet.
Hoping someone can give a little guidance on this point first.
cheers 
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radicalry00
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Registered: 16th Mar 07
Location: West Yorks Rides: Suzuki SV650
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Think of a totally new, revolutionary franchise of your own and go on Dragon's den. (Although this is easier said than done)
Seriously though, I highly doubt a bank would loan you the money upfront for investing in something like that unless you had decent savings or a good history of lending/repaying money.
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Colin
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Registered: 4th Apr 02
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What kind of franchise?
Id say you would need to have money to enter this kind of business.
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nova_gteuk
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Registered: 15th May 02
Location: South Wales Drives: The Bandwagon
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You would need a buisness plan and some kind of guarantee if it went belly up lol.
The princes trust would probaly be able to help you start up but dont expect 25k lol
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drax
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Registered: 5th Feb 05
Location: Sittingbourne, Kent
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You also need to be disabled / ignorent / immigrant / on the dole to receive anything from the princess trust dont you?
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myke
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Registered: 7th Feb 01
Location: High Wycombe, Buckinghamshire
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It's not to invent a new idea that could be franchised, it's to buy into an existing franchise. So Dragon's Den is out. Plus i'd completely fold under the pressure 
It's for mobile tyre fitting, so the commitment would mostly pay for the van, fitting and balancing eqt etc.
I've not looked into it too deeply, but i'd imagine the company selling the franchise would have business plans laid out and projected returns for the given area.
Just wondering if a bank would entertain such a proposal, or if it would need to be done through other suppliers.
It's not a brand new initiative, so i don't think Princes Trust would give a damn.
As for gaurantees, there's always the van and machinary as assets, but i'm not sure if that's enough.
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nova_gteuk
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Registered: 15th May 02
Location: South Wales Drives: The Bandwagon
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My mate started his own mobile car repair service,he went to the princes trust and they helped him out.
It doesnt really have to be a new initiative,the point of the princes trust is to help young people start a buisness on their own.
Even if they didnt give you money,they would help wiith other things 
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myke
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Registered: 7th Feb 01
Location: High Wycombe, Buckinghamshire
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Oh, cool.
Didn't realise that was the sort of thing they were interested in.
Thanks.
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jambo166
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Registered: 27th Nov 06
Location: WHITBY
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princes trust they might be able to help
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jambo166
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Registered: 27th Nov 06
Location: WHITBY
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sorry just read the above
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myke
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Registered: 7th Feb 01
Location: High Wycombe, Buckinghamshire
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Princes Trust will give you £500 towards a specific training course or qualification, or up to £4000 low interest loan to setup business if you curently work less than 16hours/week.
I work a 40hour week, so would have to quit my job even just to become eligible to apply for the loan.
any more info about whether a bank would give a business loan for this sort of thing?
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WATSON
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Registered: 16th Jun 05
Location: Fife, Scotland
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I’m looking into something along them lines as well 
It's bloody hard 
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Dave A
USER UNDER INVESTIGATION - DO NOT TRADE
Registered: 10th Dec 03
Location: County Durham
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you would need to speak to a bank, they would want a business plan and cashflow forecast. they would also want to see a decent amount of qualifications, experience and knowledge in the area of work you were looking into.
as well as the cost of the franchise, expect to pay huge costs to get the business up and running, most businesses will need at least 6 months worth of costs and overheads up front to survive until the business is established.
Then theres the costs of the premises. most franchise costsings dont include this, theres the cost of the lease, and legal costs. a typical medium sized business premises costs around £2500 in legal costs alone to arrange the lease and usually 3 months lease fees upfront if its from a private company.
And dont overlook other things such as preparing the premises, the franchisee may supply a lot of the equipment needed but look at electrics and lighting, flooring, security, ventilation, health and safety....
Then theres your income and costs while you get the business running. the bank wont fund that. Also the bank would want to see you put in at least 30% of the total startup and running costs.
so as a guide:
Franchise fee £25k
Premises costs inc lease fees and legal fees £5k+
preparation of premises £2k+
insurance and business rates (council tax) for first 3 months £800+
yoru income for first 3 months £3k?
every day costs of setting up £1-2K
then the bank will want the payment for their loan for the first 3 months £1500+
so just with the basics thats 40K to stay open for the first 3 months. A bank will want to know that the first 3 months are clear and where that cash will come from, they wont take the first 3 months profits into account to cover business costs. I am not trying to put you off, but theres no point going to the bank without the knowledge as they will not even look at your business plan if they think you dont know the basics.
princes trust is a complete waste of time, your local authority will have a business start up advice and regeneration department that will be able to help you and advise on available grants, also speak to business link (they also have a very helpfull website)
good luck 
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myke
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Registered: 7th Feb 01
Location: High Wycombe, Buckinghamshire
User status: Offline
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Thanks Dave, that's pretty concise.
What i have in mind differs slightly from how you have suggested, in that there are no premises. It's an entirely mobile service, orders are placed centrally and distributed to the local franchise who will purchase the stock and arrange the job.
That discounts the rent, rates, power, fit out, hopefully most of the legal cost, a lot of the insurance etc.
Ideally the 25k buy in would cover most of to all of the start up costs, bar personal income whilst training and initialisation is undertaken.
As i understand, after training and getting planted, it shouldn't take long at all for the jobs to start coming. I have a period of 4-6 weeks in mind, but this is pure guess work.
I invisage the franchiser will have business plans and possible projected turnover stats available, but then i'm probably underestimating the personal commitment required to get things moving.
This is just pie in the sky at the moment because i'm not overly happy at work right now, but what i think i need to do is speak with the franchiser to see whats what and take matters from there.
Thanks for the answer. most helpful
I needed to know whether a bank would entertain the whole concept before moving on to the next step.
The job probably would become a bit mundane, but a fresh challenge everyday, fresh air, a certain degree of physical and hands on stuff, plus being your own boss and eventually taking on gophers does quite appeal at the moment.
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Dave A
USER UNDER INVESTIGATION - DO NOT TRADE
Registered: 10th Dec 03
Location: County Durham
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HSBC have a specialist franchise funding department
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myke
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Registered: 7th Feb 01
Location: High Wycombe, Buckinghamshire
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excellent.
will make the inquiries, then check it out.
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Paul_J
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Registered: 6th Jun 02
Location: London
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myke, set up a kfc in windsor, I can't believe there isn't one  
It'd be a gold mine!
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myke
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Registered: 7th Feb 01
Location: High Wycombe, Buckinghamshire
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quote:
Originally posted by Paul_J
myke, set up a kfc in windsor, I can't believe there isn't one
It'd be a gold mine!
kfc is shit, plus then i might have to serve you
your chicken wouldn't be spat in Paul :
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Paul_J
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Registered: 6th Jun 02
Location: London
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quote:
Originally posted by myke
quote:
Originally posted by Paul_J
myke, set up a kfc in windsor, I can't believe there isn't one
It'd be a gold mine!
kfc is shit, plus then i might have to serve you
your chicken wouldn't be spat in Paul :
I've not eaten at KFC for a good while... but I did used to love it, beat the hell out of mcd's or anything... Fillet burger / Popcorn chicken / Fillet pieces of chicken, toasted twisters ... barbeque sauce.. YUM 
You should see the KFC in reading it's packed in the highstreet...
I seriously think there's a trick missed there in windsor, as Windsor is usually packed at weekends due to tourists, and if you left the place open late it'd catch all the drunken folk. I almost wonder whether it was deemed 'KFC' was not good enough for the Queen's presence.
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myke
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Registered: 7th Feb 01
Location: High Wycombe, Buckinghamshire
User status: Offline
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ri think subway had to fight hard to be allowed open lateish in Marlow.
They only have Wimpy other than that, and they serve your burger on a plate
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Colin
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Registered: 4th Apr 02
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Maybe a daft question but were you a tyre fitter before this idea came along or are you just looking for something different to do & this caught your eye?
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myke
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Registered: 7th Feb 01
Location: High Wycombe, Buckinghamshire
User status: Offline
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i calculate window u-values
boring as hell
fancy doing something physical / hands on / outside
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Paul_J
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Registered: 6th Jun 02
Location: London
User status: Offline
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quote:
Originally posted by myke
Thanks Dave, that's pretty concise.
What i have in mind differs slightly from how you have suggested, in that there are no premises. It's an entirely mobile service, orders are placed centrally and distributed to the local franchise who will purchase the stock and arrange the job.
That discounts the rent, rates, power, fit out, hopefully most of the legal cost, a lot of the insurance etc.
Ideally the 25k buy in would cover most of to all of the start up costs, bar personal income whilst training and initialisation is undertaken.
As i understand, after training and getting planted, it shouldn't take long at all for the jobs to start coming. I have a period of 4-6 weeks in mind, but this is pure guess work.
I invisage the franchiser will have business plans and possible projected turnover stats available, but then i'm probably underestimating the personal commitment required to get things moving.
This is just pie in the sky at the moment because i'm not overly happy at work right now, but what i think i need to do is speak with the franchiser to see whats what and take matters from there.
Thanks for the answer. most helpful
I needed to know whether a bank would entertain the whole concept before moving on to the next step.
The job probably would become a bit mundane, but a fresh challenge everyday, fresh air, a certain degree of physical and hands on stuff, plus being your own boss and eventually taking on gophers does quite appeal at the moment.
Just to check do you know someone currently doing this franchise? or can you speak to someone?
May be wise to get some inside info on reality of how much business they get / what hidden costs etc.
Otherwise the 'franchiser' (who wants to make money selling you the franchise) will say 'yeh typical average 15-20 call outs per week'. but they want to tell you that to get you to believe you'll have constant work.
Similar thing as the guys who went freelance couriers in london, big company is supposed to sub contract it to them, get told they'll get loads per week and sit there twiddling their thumbs actually getting nothing.
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myke
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Registered: 7th Feb 01
Location: High Wycombe, Buckinghamshire
User status: Offline
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That's a good point. My sister has used them before, and said the guy seemed very happy with the whole arrangement, but i've not had any real dealings with them.
I'm sure the company is well equiped to sell the franchise, so no doubt they'll have testimonials or 'soft' franchisee's who're contactable for re-assurance.
Shall prepare an email now with a view to call them mid week if they don't reply or give all the info i need.
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baza31
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Registered: 19th Apr 03
Location: yorkshire
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Do princes trust give grants to set up business rather than loans?
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