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Home » Franchise Business-How to Start a Franchise with Zero Investment?

Franchise Business-How to Start a Franchise with Zero Investment?


The economic panorama that has been dragging on since the crisis hit our country has made financial companies much more conservative and cautious when it comes to offering finance and giving financial support to entrepreneurs. A very attractive business model for which many are betting is that of franchises. However, it is well known that opening a franchise involves investing a good amount of money. But, today we will explore the counterpart i.e; how to start a franchise with zero investment.

What is a franchise?

It is a “system” by which an investor or franchise buys the right to use the brand of a service product in a market or territory that the “mother brand” – the franchise – has not yet exploited. In this way, the franchisee generates his own business in which he pays a royalty or monthly fee to the franchise. It should be emphasized that each franchisee will have different results that are not related to the payment of this right to the owner of the brand.

In this business model, the franchisor transfers its knowledge of it to a third party or “franchise”, which in turn expands its reach to areas or markets where it is not initially present.

Is it possible to set up a franchise with zero investment?

In a fairly complicated financial landscape, it is quite attractive to be able to set up a franchise with zero investment. However, we are not going to fool you, this is quite complicated. Normally, to start a franchise, you will have to pay an initial fee, as well as other types of expenses to start and get the business up and running. Notwithstanding what has been said, we know that a franchise implies a good investment.

But this business model has also been able to adapt to the new economic landscape and new models have emerged in which you have the opportunity to invest, but a much smaller amount. We tell you some of the possibilities on how to open a franchise without money :

  • Franchisor financing

Some companies do offer franchisor financing, but you’ll have to do your homework to find out which ones do. These companies recognize that potential franchisees may lack the financial resources to launch their firm, therefore they offer financing solutions to help them get started.

It may have some requirements, such as a solid credit score, your devotion to the venture, and whether or not you are a business investment.

  • Partnership

If you find yourself in a scenario where you don’t have enough money to start a franchise, one method to get out of it is to locate a partner who can help you finance the entire endeavor.

Although a solid partnership agreement that explains everyone’s obligations, distribution of funds, sharing of earnings, and an equal dissolution process is the best approach to raise funds for your franchise business, it may result in you losing entire control over the business.

  • Bank Loans

Individuals that meet certain criteria, such as an eligibility criterion, are eligible for small Business Loans from banks and credit unions.

  • Having a high credit score (from 670 to 850)
  • A favorable credit utilization rate (under 30 percent )
  • A long credit history with banks

If you meet all of the eligibility conditions, you may be eligible for a typical bank loan to start your own franchise.

  • SBA Loans

SBA loans are well-known for being the most cost-effective way to borrow financing to purchase a franchise without putting any money out of your pocket. The Small Business Administration (SBA) is a federal agency that provides long-term loans at low-interest rates.

SBA has a slightly different connotation in reality. They don’t actually give you the money; instead, they use your guarantee to get a loan from a typical bank or credit union. This is the best alternative for anyone with a low credit score.

How ReferLoan can help?

ReferLoan is a Fintech company which is holding 345+ financial products on behalf of more than 175+ Banks/NBFCs. We as a company are constantly evolving to be the best financial authority that can help set up a franchise with zero investment.

The ReferLoan franchise modelis here to provide you with huge and unlimitedbenefits:

  • You can be a boss of your own,
  • We offer less operating costs with a higher growth rate.
  • Sheer expansion with brand recognition.
  • Make connections in the marketplace.
  • Direct connections with financing authority or banks/NBFCs.
  • Begin your business from scratch.
  • Complete digitalization of product.

Thus, if you are looking for a smart business idea, then you can rely on ReferLoan as we are here to help businesses grow on a positive note! Don’t waste time and get in touch with us to give wings to your dream business.

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