1851

One of the first things a franchisor or franchisee has to think about before jumping into the entrepreneurial world of franchising is financing. Having the funding for your business is the single most important thing to keep it afloat, so the financing behind the business must have a solid structure to avoid any hiccups. To get a deeper look on how both franchisors and franchisees can best finance their businesses, whether setting up for an initial sale or resale, <a href="http://1851franchise.com" style="text-decoration-line:none" target="_blank">1851 Franchise Magazine</a> connected with Brian Frank, Texas Capital Bank&rsquo;s senior vice president and group head of franchise finance for expert insight.

Dallas-based <a href="http://www.texascapitalbank.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=how-texas-capital-bank-helps-franchisors-and-franchisees-prepare-for-a-sale-2707377" target="_blank" rel="nofollow" style="text-decoration-line:none" target="_blank">Texas Capital Bank</a> has specialized in commercial and private banking since 1998. The bank&rsquo;s client base consists of privately-held mid-sized business and their owners, independent mortgage companies, home builders and commercial real estate developers. The bank has a specialized focus in the franchising sector, and Frank specifically has years of experience working with franchisees and franchisors during their financing process.

&ldquo;We work with franchisees and franchisors and discuss with them what exactly they are trying to accomplish,&rdquo; said Frank. &ldquo;We talk to each client about their needs and figure out what the right mix of debt and equity is for their particular situation. There is no cookie cutter solution, it&rsquo;s more of an art than it is a science. We work with each individual operator and help them reach their end goal.&rdquo;

The world of financing is different for a franchisor and a franchisee. So, starting with franchisors &ndash; how can they best set themselves up for a sale?

&ldquo;Make sure the concept is replicable. Having a franchisee run a location is far different than bringing on new people to run your already successful store,&rdquo; said Frank. &ldquo;Everything must be methodical so you can hand it over and have the franchisee run it on their own through the playbook that you created. I think it&rsquo;s incumbent for franchisors to talk to contacts in the industry who have gone through a sale and go to financial institutions to guide them on how best to get ready for a sale. Find counsel with investment banks that focus specifically on the franchisor space.&rdquo;

Now, when we look at this sale process through the lens of a franchisee, the game changes a bit.

&ldquo;The franchisor must be on board with a franchisee selling their location, and then the buyer that takes over the location,&rdquo; explains Frank. &ldquo;We typically suggest that franchisees talk to other franchisees in the system that want to expand, and to explore a transaction that way. With this route, you are keeping the location with a franchisee that is already familiar with the operations. Work with accountants, bankers and lawyers that have experience with these types of transactions.&rdquo;

Moving forward, Frank predicts a certain trend in the franchising industry where all of these tips will come into play, in a big way.

&ldquo;I think you are going to continue to see franchisee to franchisee sales. There is a first generation of franchisees that have been doing this for a long time and there&rsquo;s an opportunity to sell,&rdquo; said Frank. &ldquo;As interest rates rise &ndash; what does this implication mean? The labor market is tight and there&rsquo;s higher pressure on minimum wage. As franchisees are forced to better manage costs, financing is going to become an even bigger focus moving forward.&rdquo;

How Texas Capital Bank Helps Franchisors and Franchisees Prepare for a Sale

1851 Franchise

1851 Franchise Magazine connects with Brian Frank, Senior Vice President, Group Head Franchise Finance for a deeper look on franchise financing.

how-texas-capital-bank-helps-franchisors-and-franchisees-prepare-for-a-sale

The Cleaning Authority

Franchise Journal Magazine: The Cleaning Authority Sets the Standard in Residential Cleaning

cleaning-authority-franchise-journal-feature

TruBlue Home Service Ally

Build a Business That Supports Your Lifestyle Goals With TruBlue Home Service Ally Franchise

 trublue-home-service-ally-lifestyle-franchise-success

Layne's Chicken Fingers

Photo of Layne's Chicken Fingers restaurant with "Now Open" inflatable on roof

Layne’s Chicken Fingers Opening Blueprint Drives Success From Day One

franchise-opening-playbook

Right at Home

Veterans, Army, Navy, Right at Home franchisees, Veterans Day

Veterans Excel as Right at Home Franchisees: Here's Why

veterans-in-franchising-right-at-home-success

Why This Corporate McDonald’s Rep Decided To Open His Own Franchise With The Cleaning Authority

kent-lewis-franchise-success

Buying a Franchise Masterclass

 Franchise Opportunities

Get Support Buying a Franchise

How to Buy a Franchise White Paper

How to Buy a Franchise

How to Sell Franchises

How to Grow a Franchise

Find a Franchise Supplier

1851 Franchise Opportunities

Franchisor News

Franchisor Power Rankings

FranCamp Mastermind Summit

Franchise Development Website Builder

Franchise Resources

What ALEC-Laffer's Report Means for Franchising

Website Awards

Power Rankings

About 1851

Advertise on 1851

Contact 1851 Editorial

Terms of Use

1851 Login

GROWTH CLUB LOGIN

facebook

instagram

twitter

linkedin

youtube

houses, Why Top Franchises of 2025 Outperform Independent Businesses

Why the Top Franchises of 2025 Outperform Independent Businesses

how-franchises-outperform-independent-business-2025-tech-data

Photo of Happinest Brands teams standing together in front of branded vehicles

Happinest Brands Continues Strong 2025 Trajectory With Major Q3 Growth and Strategic Wins

happinest-brands-q3-franchise-growth

Franchise Owners Step Up To Support Communities During Government Shutdown - 1851 Franchise

Franchise Owners Step Up To Support Communities During Government Shutdown

franchise-community-support-shutdown

Slim Chickens Opens R&D Center at World Headquarters To Drive Menu Innovation

slim-chickens-rd-center-fayetteville

Nearly 40% of Americans Are Eating Out Less as High Prices Redefine Dining Habits

nearly-40-of-americans-are-eating-out-less-as-high-prices-redefine-dining-habits

NJCAR v. Ford - New Jersey Supreme Court Limits Standing Under Franchise Practices Act

New Jersey Supreme Court Limits Standing Under Franchise Practices Act

new-jersey-franchise-practices-act-njcar-v-ford

A Practical Playbook: Who To Call First When Franchising Your Business

franchising-your-business-who-to-call-first

image of jerome hanway from right at home Las Cruces, New Mexico 1851 franchise franchisee spotlight

Jerome Hanway Is Building His Right at Home Franchise Around His Mission To Serve

right-at-home-franchise-las-cruces-jerome-hanway

Photo of group of dogs standing together in day care facility

Top Pet Boarding and Day Care Franchise Opportunities for 2025

top-pet-boarding-daycare-franchises

image of franchise deep dive from 1851 franchise on doody calls franchise authority brands

DoodyCalls Franchise Costs, Fees, Profit and Data for 2025

doodycalls-franchise-deep-dive

image of michael panos and michel panos, owners of mellow mushroom in Atlanta

The Panos Family’s Role in Preserving Mellow Mushroom’s Character — and Expanding in Atlanta

mellow-mushroom-franchise-panos-restaurant-group-metro-atlanta

How Texas Capital Bank Helps Franchisors and Franchisees Prepare for a Sale

MORE STORIES LIKE THIS