Franchise Funding Snapshot
| Program | Use Case | Amount | Rate / Factor | Term | Timeline |
|---|---|---|---|---|---|
| SBA 7(a) | Buy-in + working capital | $200k–$5M | Prime + 2.75% | 10–25 years | 45–75 days |
| Equipment Loan | Fleet & install tools | $25k–$350k | 8%–20% APR | 24–72 months | 3–10 days |
| ROBS / 401(k) rollover | Equity injection | $50k–$500k | Plan fees | N/A | 3–4 weeks |
| Working Capital Loan | Launch payroll & marketing | $50k–$250k | Factor 1.18–1.45 | 6–24 months | 2–5 days |
Startup vs Conversion Costs
- Franchise fee: $40k–$120k depending on territory size and brand tiers.
- Build-out & signage: Retail showroom, warehouse racking, and branded wraps average $60k–$150k.
- Fleet & equipment: Expect two to four wrapped trucks plus installer kits—$160k–$280k.
- Technology stack: CRM, dispatch, and franchise-provided software packages run $10k–$25k up front.
- Operating reserve: Franchisors typically require 3–6 months of expenses on hand.
Financing Stack Blueprint
Most franchisee files blend long-term bank debt with faster specialty programs to hit the franchisor’s deadline. A typical capital stack looks like:
1. Equity Injection
10%–20% of the total project paid in cash, ROBS funds, or seller financing credits. Lenders verify seasoned funds in personal and business accounts.
2. SBA or Bank Loan
Covers franchise fee, build-out, and a portion of equipment. Requires a full business plan, projections, and franchisor agreement.
3. Working Capital Cushion
Supplement with a line or short-term loan so you can front payroll and marketing during ramp. Plan for 3 months of expenses even if the franchisor suggests less.
What Lenders Review
- Credit score 660+ for SBA, 600+ for non-bank working capital.
- 3 years HVAC management or trade experience (resume + licenses).
- Personal financial statement showing post-close liquidity ≥ 10% of project cost.
- Executed franchise agreement and FDD receipt.
- 12-month projections matching franchisor unit economics.
- Purchase orders or quotes for vehicles, equipment, and marketing launch.
Timeline & Milestones
Week 1–2
Gather financials, personal tax returns, resume, and FDD exhibits. Align on total project cost.
Week 3–5
Submit SBA package, order valuations if required, and line up equity injection documentation.
Week 6–8
Finalize loan approval, complete franchise training, and schedule equipment delivery.
Week 9+
Fund, close on lease build-outs, and deploy working capital tranches for hiring and marketing.
Working Capital Planning
Franchise playbooks often underestimate launch payroll and media spend. Use the calculator below to model how many installs you need to cover loan payments plus royalties.
FAQ
How much cash do I need to bring?
Plan on 20% of total project cost after accounting for rollovers. Some franchisors accept 10% if you can document additional collateral or seller financing.
Can I finance the franchise fee?
Yes. SBA lenders and some specialty programs allow the franchise fee to be financed as part of total project costs, provided you inject the required equity.
What if I'm converting an existing shop?
Conversions still require the franchisor's training and marketing launch budget. Lenders will review trailing 12-month revenue and add-on costs for rebranding, software, and royalty transitions.