Franchise Finance Panel Tells How to Attract Capital
Leverage. Leverage. Leverage. Three panelists said that word at once when asked to name the biggest deal-killer when they consider making loans. The panel kicked off the day’s events at the Franchise Finance & Growth Conference in Las Vegas, March 26 and 27, co-sponsored by Franchise Times and Boefly.
“It’s high leverage that’s the issue,” explained Armando Pedroza with RBS Citizens Restaurant Finance, one of the panelists. “But you have to drill down further to find why is it high leverage.”
The analysis starts with the brand for Dan Holland of Cadence Bank, also a panelist. “You’ve got to understand the brand. Where’s the growth coming from?” is a question he asks.
Panelist Mike Record of Wells Fargo starts with the brand as well, then digs into behavior. “How does the franchisor behave when things go bad in the sandbox? How focused is the franchisor on store level profitability?”
Presentations from 14 franchisors round out the day at the conference, designed to bring lenders and investors together with franchisors who seek capital for their systems. They included Popeyes, Burger 21 and Dairy Queen in the morning, and will continue with Papa Murphy’s, Massage Envy and Corner Bakery Café, among others, in the afternoon.