Paris Baguette Partners with Celtic Bank for Franchisee Financing Support

Paris Baguette, the bakery café concept with nearly 4,000 units worldwide, requires an initial investment of at least $635,765 to begin the operation of the concept. However, it understands that, for many, this amount is not something the average business owner has on hand, and it has built a partnership with Celtic Bank to provide trusted franchise financing options to prospective Paris Baguette franchisees.

“Celtic Bank has been an SBA lender for about 15 years and focuses heavily on franchising,” explained Phil Winn, a franchise loan specialist and vice president at Celtic Bank. “My role is to bring brands into the bank, get them comfortable with us and, in turn, help their franchisees.”

Celtic Bank and Paris Baguette partnered up around three years ago, through a relationship that Winn had with Mark Mele, Paris Baguette’s Chief Development Officer. Through this relationship, Mele and the Paris Baguette development team are able to refer prospective franchisees to both a loan specialist and larger organization as they seek investment financing.

Available Financing Options through Celtic Bank

“Most franchisees are going to be leasing their space, so there will be a landlord, and they will not have real estate collateral like they would if they had bought the building,” Winn explained. “So the best program for that is an SBA 7 loan. The qualifications for that are fairly open; it’s at the bank’s discretion whether they want to lend to a borrower within that program or not. At Celtic Bank, we look at a lot of factors to make sure the franchisee qualifies for the program and is going to be successful with the brand.”

Though it is a loan, qualification for an SBA loan is a more involved process than that of securing something like an auto loan.

“With business lending, especially SBA, generally, we’re looking at projections. We’re taking into account whether the applicant owns any other businesses or if they have outside employment,” Winn explained. “Those are all benefits, but a lot of the time, people want to be active in Paris Baguette and run that full-time, so we need to make sure that the business is likely to do well based on the demographics of the area and other factors specific to their location.”

The Current Economic Landscape and Small Business Financing

Many prospective franchisees are feeling apprehensive about the state of the market, and a notable amount of this anxiety has bled into the lending process. However, Winn says, franchisees should feel secure as they work through the process.

“There’s a lot of concern right now over the economy,” he explained. “There have been a lot of conversations about whether it makes sense to move forward, and anxiety is high. I’m explaining that, because the bank felt confident the franchisee is going to succeed, they should feel comfortable moving forward.”

Small business lending is far less secure for the lender than something like an auto loan or mortgage. There is no concrete collateral, which is why the bank does such detailed due diligence. Winn explained that Celtic Bank partners with Paris Baguette largely because of its confidence in the franchisor’s model as a whole. The bank is positioned well to find solutions for prospective Paris Baguette franchisees because it is confident in its projections and the brand’s ability to source qualified franchisees and real estate during the development period.

“We know the brand pretty well. We’ve worked with a lot of franchisees and know the corporate team pretty well. We’re knowledgeable of everything within the FDD and other financials,” he explained. “We really understand the brand and why it works.”

As Winn continues through the partnership with Paris Baguette, he says it has been an enjoyable experience and he looks forward to helping many more franchisees open new stores or expand their footprint with the brand.

“I’m with the franchisees throughout the process. From that initial call through structuring the term sheets, closing and servicing the loan, I’m there the entire time,” he said. “I’m making sure that everyone at Celtic Bank does their part to get a successful close, and I want to make sure we get the franchisee a close that works for them. It’s a good partnership.” 

The total investment to franchise with Paris Baguette ranges from $652,565 and $1,750,900 including a $50,000 franchise fee. For more information, please visit https://parisbaguette.com/franchising/.