{"id":5192,"date":"2016-04-04T10:48:01","date_gmt":"2016-04-04T15:48:01","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/smallbusiness\/starting-a-business\/franchise-development-and-financing.html"},"modified":"2026-05-08T15:48:00","modified_gmt":"2026-05-08T20:48:00","slug":"franchise-development-and-financing","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/franchise-development-and-financing.html","title":{"rendered":"Franchise Development and Financing"},"content":{"rendered":"\n
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Franchise Development and Financing<\/h1>\n\n
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\n By Amber Sheppard, Esq.<\/a> | Legally reviewed by Catherine Hodder, Esq.<\/a>\n | Last reviewed\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n\n

Whether you\u2019re already a franchisor or franchisee or want to be\u00a0one<\/a>,\u00a0franchise development<\/a>\u00a0requires financing. Franchise financing options and methods are available for all borrowers in a franchise development. Start-ups or established franchised operators need franchise loans when\u00a0buying a business<\/a>\u00a0or expanding an existing\u00a0franchise business<\/a>.<\/p>\n

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What Is Franchise Development?<\/h2>\n

Franchise development is creating a new franchise<\/span> or expanding a franchise into a new market. If you\u2019re an existing franchisee<\/span> and own a franchise location, you may want to create your own franchise. Franchise brands can bring in a lot of funding for the owners, but starting one takes work. In addition to following federal laws, you must create a\u00a0franchise disclosure document<\/a>. That document requires accountants, strategists, and lawyers to make sure you don\u2019t violate the Federal Trade Commission Franchise Rule standards.<\/p>\n

Types of Franchise Financing<\/span><\/h2>\n

Studies reveal<\/a>\u00a0that\u00a0franchised businesses<\/a>\u00a0generally experience lower default rates than independent businesses. This is why entrepreneurs<\/span> have an easier time securing small business loans<\/span> for a franchise than an independent business. Lenders<\/span> and investors like franchised businesses because the franchisor<\/span> typically has an established customer base and product or service.<\/p>\n

Regardless of what type of start-up costs<\/span> or business financing<\/span> you choose for your new business<\/span> or franchise, lenders<\/span> and investors will want to see your:<\/p>\n