We, like many of you, were just at the IFA Convention in Orlando earlier this month. There we all saw many great franchise growth opportunities. We also discussed and debated the continuing travails of getting funded in “This Economy” when credit remains extremely tight. As you might recall, this blog has covered this ground a little bit before.
While true, it seems too obvious to say we are hopeful that the gathering speed of the economy will solve this problem–especially when the economy gathered speed in the first quarters of both 2010 and 2011 only to stumble thereafter. And home prices continue to fall, eliminating home equity as a funding source. Nonetheless, opportunities exist and franchise growth awaits. So, what is a nimble franchise system to do?
A recent article in the Wall Street Journal by Emily Maltby might suggest an answer that question. Admittedly, the focus of the article is on start-up businesses. But, after all, what are new franchises but start-up businesses (of course, start-up businesses coupled with a powerful brand and uniform system standards)? Ms. Maltby disects several options for getting funded right now, including peer lending and crowdfunding, asset-based credit, the SBA, and angel investors.
This last option is intriguing. Whle anecdotal, recent conversations with a handful of angel investors who have mostly sat on the sidelines during the last 3 years suggest to me that they are getting antsy and interested in returning to the investing fray–either individually or through syndicates. Given that many startups carry greater risk than proven franchise concepts, I am hopeful that more angel investors will take a fresh look at franchising investment opportunities.