How Franchise Lenders Compete
How Franchise Lenders Compete

We asked six lenders how they’ve established an edge in a crowded marketplace.

As the economy continues on a years-long upward trajectory that began in 2011, just two years after the height of the Great Recession, small-business investing has become a more lucrative proposition for a larger and more diverse pool of entrepreneurs. With that shift, the finance sector has stepped up to meet a greater demand for loans. More lenders are offering more loan options for more investors, and as a result, the field of lending options has become more crowded than ever before.

“The franchise finance space becoming increasingly competitive,” said Richard Riecker, Senior Vice President of BankUnited’s Bridge Funding Group. “Right now, there are far more lenders than ever before.” As a result, lenders have had to find an edge to stand out. We talked to franchise finance experts from six lending institutions to learn how they’ve managed to stand out in the industry.

BBVA Compass

BBVA Compass’s Food Franchise Finance division takes a vertical approach to franchise lending, offering packages for small, medium and large franchisees, and helping investors graduate from one level to the next.

For our small franchisees — people starting out in the one-to-five-unit range, we have a great SBA loan program,” said James Short, Director of Food Franchise Finance. “Once they get into the 8–10 rage, we transfer them out of SBA into conventional loans. For a franchisee who has more than 40 or so units, we’ll transfer them to our nationwide direct sales team, who are typically going after the top 200 franchisees across the country.”

Short continued, “Whatever the level, we service the banking and cash management needs of the franchisee. Our local lenders work closely with the franchisee for their lending needs, and folks from my team act almost as industry consultants — we call ourselves ‘champions’ — to provide information and credibility to the local lenders.”

Trinity Capital

Working within the top 100 franchise brands, Trinity Capital has closed more than 500 transactions exceeding $20 billion in the franchise space.

“We provide our clients with a menu of debt and equity options, and we work carefully with them to understand the advantages and disadvantages of each option,” said Kevin Burke, Founder and CEO of Trinity Capital. “Moreover, we have the franchise restaurant industry's leading relationship set with institutional investors, such as family offices, private equity and pension funds. We believe that presenting our clients with the optimal amount of competition and options results in the ideal outcome for each particular client.”

Burke added, “We believe that success in our industry starts with solving any given client’s challenge on their terms, timing and pricing, and we have the wherewithal to make that happen.”


BankUnited’s Bridge Funding Group provides franchisee financing for a variety of needs, including acquisitions, refinances, new builds, remodels and branding refreshes.

There are a lot of lenders out there, and they all kind of do the same thing within their segment,” said Richard Riecker, Senior Vice President of Bridge Funding Group. “Our biggest advantage is our expertise. We have an extremely experienced staff in every corner of our operation.”

He continued, saying, “We know the industry inside and out, which is a big advantage for borrowers. We hear from borrowers all the time about their experience with other lenders and how frustrating it is to have to spend their time educating the lender on their business and segment. Our expertise allows us to cut through all of that and provide first-hand insight.”


CapitalSpring’s Restaurant Investment Group is a restaurant-focused investment fund. The bulk of the Restaurant Investment Group’s investments fall under one of three categories: franchisee investments, franchisors investments and investments in corporate-owned chains.

“[Our advantages over other lenders] boils down to two things,” said Erik Herrmann, Managing Director of the Restaurant Investment Group. “The first is flexibility. We can be a conventional lender, a minority partner, and a control investor. We can be all of those things or mix and match components depending on the needs of the partnership. So rather than looking at the products available on the market and telling a franchisee what we can and can’t finance, we can talk to them, find out what their goals are, and develop a package that works.”

Herrmann continued, “The second thing is our focus. We invest only in the restaurant space. We’ve invested in fifty different brands and thousands of restaurants over the past 13 years. So we know the space. We’ve seen every angle of it. We have encountered all of the challenges that our franchisee partners are likely to face. We have a strategic perspective that other lenders don’t have. Compare that to a conventional lender operating across multiple industries, and it’s just a completely different level of engagement.”


Unlike the other institutions on this list, BoeFly does not actually provide loans for investors. Instead, the online marketplace connects commercial investors with the most appropriate lenders for their projects.

“[We] build a well-documented financing request. We provide the candidate with a dedicated rep on our team who is going to capture the key documents we know lenders will ask for, and then prepare a bank-ready financing request,” said Mike Rozman, BoeFly’s CEO and Co-Founder. “We are ultimately going to match each candidate up with the right lender or lenders to provide the best financing options.”

Rozman added, “For lenders, our online marketplace allows banks and other lenders to source deals they wouldn’t otherwise find. And then we can match them up with candidates depending on their financing options.”

He continued, saying, “The diligence we provide is unique and extremely valuable. We also have a tool called bQual that lets investors know immediately if they meet the requirements to apply for a given brand. That’s just one example of how we streamline the process and put everything in very clear, simple terms, which is hard to find in this industry.”

Pinnacle Commercial Capital

A smaller bank, Pinnacle Commercial Capital distinguishes itself by focusing on lending for strong franchise brands that larger institutions have ruled out.

“Our niche is a little different,” said Craig T. Weichmann, Vice President of Pinnacle Commercial Capital. “It’s like when Avis was battling Hertz years ago and said, ‘We’re number two, but we try harder.’ That’s our thing. There are a lot of bigger banks, but the bigger you become the less personal you are. We work closely with our clients to get them to the next level of development, and we get a lot of repeat business as a result. It all comes down to trying harder.”

Weichmann added, “From a lenders perspective, size is traditionally seen as very important. The biggest banks typically focus on the largest, tier-one brands. Right now, at the top of the heap is Taco Bell. That’s a premier loan that every brand clamors to get a shot at. That’s the easy path. That’s no-brainer lending. Once you get into tier-two and tier-three, you find some projects that the biggest banks aren’t looking at, and that’s where we have an opportunity to try harder. There was a sort of earthquake in the industry this year when Nation’s Restaurant News’s annual Top 200 report ranked Domino’s above Pizza Hut for the first time — Domino’s was number nine and Pizza Hut slipped to 11. There have been some warning signs that Pizza Hut was slipping for a while, and now banks are wondering if they should be financing Pizza Hut deals. But those rankings can represent superficial slips, so if we have an investor who wants to purchase a block of Pizza Huts, we’re not going to rule it out. We want to learn more about who the franchisee is, what kind of gameplay they have and if they are cutting the appropriate deal with the brand. “

“The test at the end of the day is our portfolio, and we’ve got an excellent portfolio of well-performing loans. And that’s because we go the extra mile.”