You want to be a business owner. You've done your due diligence and all of a sudden you realize you don't actually have the thousands of dollars in funding typically necessary to open a location. Now what do you do?
In December 2013, CrowdFranchise – a community crowdfunding resource specific t.....
In December 2013, CrowdFranchise – a community crowdfunding resource specific to the franchising industry – provided a solution. The resource, pioneered by Mandy Calara, founder and CEO of Forever Yogurt, allows community members to become franchisees by owning a piece of the business, rather than the entire thing, creating group-owned franchise locations.
Similar to typical crowdfunding resources, CrowdFranchise will offer a platform for entrepreneurs to accumulate funding by raising small amounts of money from interested parties. However, unlike other sites, CrowdFranchise will function like a multi-investor franchise – the percentage you invest equates to the amount of the business that you have a stake in, including profits and voting share.
“If the operator fails to produce, the crowd may vote to make changes. They are true owners in the business and will have voting rights,” Calara said.
The revolutionary concept will help franchisors expand their footprint through opening new units, while also allowing those interested in becoming a franchisee to turn their dream into an actuality.
“Franchisors will generate hundreds of thousands of leads to their brands who are ultimately financially under qualified,” said Nick Powills, CEO of No Limit Agency. “Now, when a lead inquires, they can continue to be a lead. While they may not have the financial resources to become a single operator of a business, they can still own a piece of a franchise in their local community. This opportunity to expand the bubble has the potential to revolutionize franchise investing.”
Under the model, the chosen operator will be responsible for the day to day responsibilities, and will be required to provide profit and loss statements to stakeholders to ensure full transparency. To further protect investors, CrowdFranchise will vet franchise brands eligible for crowdfunding, which will guarantee that only quality brands will gain support.
Moreover, as an added incentive to participate, no fees will be charged during the initial stages of the launch, as Calara is realistic about the fact that there may be kinks that need to be worked out.