Franchises Look To Visa Program To Lock in Foreign Investors

1851 Project: News of the Moment Franchises Look To Visa Program To Lock in Foreign Investors The Wall Street Journal reports on the increasingly popular EB-5 program, which allows foreign investors to obtain permanent residency by investing in U.S. business.  As franchises struggle to find buyers who can secure financing, a handful are turning to a group of budding owners with cash in hand: wealthy immigrants looking for a green card. Chains such as YoBlendz, Elements Therapeutic Massage and Battery Giant have begun pitching themselves to well-heeled foreign buyers using so-called EB-5 visas as a selling point. The federal program, launched in 1990, gives foreign nationals the chance to obtain permanent residency by investing a minimum of $500,000 in a U.S. business. The catch: The investment must create at least 10 new jobs within two years, or the foreign investor is sent back home. Despite the risk, franchisers see it as a chance to lure buyers who are set up to seal a deal quickly. And for foreign applicants who lack the entrepreneurial chops to launch a venture from scratch, franchises offer a ready-made business model with a proven record, says Stephen Caldeira, president of the International Franchise Association, a franchising trade group. “We’re seeing growing demand from franchisers for well-capitalized investors, and EB-5 applicants see franchising as a safer bet, in terms of an investment,” Mr. Caldeira says. Last year, 6,343 foreign nationals applied to the EB-5 program, up from 6,040 in 2012, and just 470 in 2006, according to the latest data from U.S. Citizenship and Immigration Services. The agency estimates that as of September 2013, the program has raised more than $8.6 billion and has created some 57,300 jobs. Interest in the program has skyrocketed since the financial crisis, as traditional forms of financing dried up, immigration lawyers say. Several big companies have tapped the once-dormant program to fund huge projects through hundreds of foreign investors, including Marriott International Inc., Sony Pictures Entertainment, and the developers of the Barclays Center, home of the National Basketball Association’s Brooklyn Nets. Read more by clicking: http://online.wsj.com/news/articles/SB10001424052702303465004579324104108839042?KEYWORDS=franchises&mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702303465004579324104108839042.html%3FKEYWORDS%3Dfranchises