Answer: The cost to begin a franchise is disclosed within that franchise’s Franchise Disclosure Document. There are many potential financing options. They are generally described as debt or equity options. Debt is money that is borrowed. Three common types of borrowing include 401k or retirement plan loans, Small Business Administration loans (SBA loans), and Home Equity Lines of Credit (HELOC). 401k loans and HELOC’s are very popular, as they tend to be a relatively quick way to borrow. Equity financing is cash invested in the business that does not have to be repaid.
To learn more about how to finance your franchise, take a look at our article “Purchasing a Franchise.” Not sure what a Franchise Disclosure Document is? We break down all 23 items in our article “Introduction to the Franchise Disclosure Document.”