mergers & aquisitions

Franchise Financing

Plymouth Rock Capital has created a specialty financing program designed exclusively for franchisees. Our investment banking arm provides an alternative to traditional cash based collateral lending.

Acquisition and Expansion Financing for Franchisees

Qualified candidates are offered capital finance for their franchise acquisition or expansion requirements, at or below conventional loan rates. Closings can occur within 45-60 days, or less on an expedited basis.

The benefit of the program is, through our detailed modeling, our ability to collateralize the cash flow of your existing and that of the target business. This generally allows for much lower cash collateral than would otherwise be required - something that expanding businesses find very attractive.

  • Direct lender relationships
  • Term Sheet and commitment available within 14 days
  • Target loans are at commercial rates
  • Strength of our Investment Bank procuring the loan
  • Strong emphasis on Franchisee track record, de-emphasizing personal collateral where possible
  • Loan sizes from $300,000 to $3 million, most often in the $1 -2 million range
Other Advantages
  • All out of pocket fees are generally credited against your equity contribution
  • The vast majority of fees are payable at closing and waived in the event that no financing event occurs
  • We strive to roll all or substantially all of the fees into your franchise loan so that you receive full credit at closing – we understand the need to lessen the strain on your cash flow
  • Loans are generally amortized over 10 years, longer for real estate based transactions

Our typical clients are those who are:

  • (a) Refinancing debt for existing units, often multiples, while seeking expansion capital for the acquisition of additional units;
  • (b) Seeking expansion capital for multiple units or aggressive area development;
  • (c) In need of working capital or capital for partner buy-out; or
  • (d) Financing for equipment and leasehold improvements.
Sampling of Franchise Systems for which we serve as a Financing Partner:
“Owning a franchise allows you to go into business for yourself, but not by yourself.”

Matt Haller, Director of Communications for the IFA

According to Bob Grappa, in his article The Strength of Franchising, Franchising remains the most popular system for growing a business in the United States today. “According to every government survey, franchising has experienced explosive growth since the mid-70s and is expected to be the leading method of doing business in the new century.”

There are over 2,500 franchise systems in the United States alone with over 534,000 franchise units. According to Gappa, this represents over 35% of all retail and service revenue in the U.S. economy. Gappa notes that some of Franchising's advantages over going into business for yourself include “opening quicker, experiencing success sooner, developing a customer base faster, having less risk and being more profitable”.

According to the IFA, franchise businesses will continue to grow at a faster rate than other businesses in terms of job creation, new business formation, economic output and GDP contribution. In the last decade:

  • The number of franchise establishments in the United States will increase by 1.3 percent, from 747,359 to 757,438 (an increase of 10,079)
  • The number of jobs in franchise establishments will increase 1.9 percent, from 8.101 million to 8.257 million (an increase of 156,000)
  • The output of franchise establishments in nominal dollars will increase 4.2 percent, from $769 billion to $802 billion (an increase of $33 billion)
  • The gross domestic product (GDP) of the franchise sector is projected to increase 4.0 percent, from $454 billion to $472 billion (an increase of $18 billion)
  • Business Services and Commercial & Residential Services will rank as the top two sectors in both franchise employment growth and growth of the number of establishments
  • Quick Service Restaurants – the largest franchise business line – will rank second in the growth of output and will see growth rates of employment and new businesses that are higher than the franchise sector average