Financing a Franchise
The Zoom Room, like all other franchises, requires that all applicants meet certain financial criteria to ensure that they will be sufficiently capitalized when starting their new business. Franchisors require minimums for both net worth and available liquid capital. The majority of franchisees, even if they possess sufficient cash on hand to self-finance, will at least consider financing a portion of their new enterprise in contemplation of optimizing positive cash flow.
The Zoom Room requires that all applicants for a single unit have a minimum of $150,000 in net worth, as well as a minimum of $75,000 in available liquid capital. (For multi-unit developers seeking to open three or more units, these minimums would be higher.)
Because the typical all-in cost to open a single Zoom Room is approximately $250,000 (including franchise fee, three months’ rent, build out, security deposit, travel costs, all equipment and retail inventory, insurance, and all other costs inclusive) but our available capital requirement is $75K, our expectation is that the vast majority of applicants will seek some type of financing. The most common types of financing are SBA loans, 401K rollovers, and private financing (i.e. through friends, family and business partners.)
Available liquid capital refers to just that — funds you have readily available in bank accounts, stocks and the like. The value of your home or credit that has been extended to you do not count toward your available liquid capital. Some applicants occasionally ask why, if the intent is to finance, we would require that they possess a specified minimum of liquid capital. The easiest way to explain this is by way of analogy to buying a home; before any bank would extend a mortgage to you, they’d first need to see that you can provide a sufficient down payment on the property — no bank will finance the entire cost of the home, and the same applies to funding a business, be it a franchise or otherwise.
We have partnered with industry leader Benetrends to provide fast and easy franchise financing assistance to Zoom Room applicants. Initially, they can assist you by establishing that you are indeed well qualified to become a franchisee. And if you are granted a Zoom Room franchise, they can streamline the process for obtaining an SBA loan or 401K rollover.
To get started in determining your eligibility, please use this calculator below, provided by Benetrends. Once you enter your information, you will instantly see your results appear on the screen below – showing you which types of financing you’re likely to qualify for, and what amount of funding you’re estimated to receive.