Franchise financing opportunities
2020 July 09
Another successful partnership
Recently, we had the opportunity to contribute to the business development of "Švaros Broliai", one of the largest tunnel car wash networks in Lithuania, and help a new business - the franchisees. Franchise financing is a new type of deal, so we are glad that all parties were satisfied with the cooperation.
"Svaros Broliai" thoroughly considered the details of the transaction and cooperated promptly, so the financing of this project went extremely smoothly. Collaborating with the client to change their business model was a new challenge for us. Such projects are especially interesting and, after their successful implementation, provides professional satisfaction,” - Aurimas Putna, Head of Business Development at mano.bank explained.
New business model in Lithuania
Today we still do not have many successful examples of franchising - it is a fairly new business model in Lithuania. So far, we have too few brands with a single location to generate enough profit for both the franchisee and the franchisor. Furthermore, the franchisors can often feel distrust and fear in revealing their trade secrets. There is a lot of hesitation among the franchisees as well, mainly about the value they create for themselves, as a successful franchise location tends to create a lot of value for the brand owner. Franchisees consider the potential long-term value of the business (excluding net profit) - how and for how much they will be able to sell their business in the future.
Franchisees are advised to assess the risks
Potential franchisees should adequately assess what financial resources will be needed to help the new franchise location achieve profitability and what financial or consulting assistance the franchisor can provide. Also, in addition to financial injections before becoming profitable, future operational challenges and risk management need to be responsibly assessed.
Attractive business model
Franchising is based on the collaboration between the owner of a successful business concept and the entrepreneur seeking to start their own business. Despite the low prevalence of the franchise model in Lithuania, it is one of the most popular business development models in the world, attracting entrepreneurs with its exceptional advantages.
For the entrepreneur looking to start a business, the franchise model promises three times the probability of staying in the market than starting a business on their own, as well as benefits such as brand awareness, a proven business model, economies of scale and easier attraction of financing.
For a successful business owner, franchising allows them to achieve exceptionally fast low-risk business development, stable and higher cash flows, growth in network value, and attraction of motivated partners.
Franchising, while a great way to start your own business, often requires more financial resources to start a business. It is therefore important to prepare well and find competent funding partners.
“We always strive to get to know our customers and their businesses in great detail, to understand their needs and capabilities, therefore we consider non-traditional business models. We are looking for brave entrepreneurs with good ideas - together we will be able to find the right solutions for all parties,” said Aurimas Putna, Head of Business Development at mano.bank.
Want to know more about your business financing options? Fill out the business financing form and our consultants will contact you within one business day.
You can fill in the business financing application here: https://www.mano.bank/business/credit.