Timing Is Everything When Seeking Growth Capital
Lani Dolifka is CEO of Watermill Express, one of three emerging franchises featured in Living Large in each issue of Franchise Times.
“Rather than the ‘when,’ it’s far more important to focus on ‘who’ you are partnering with and how the deal is structured,” says NRD Capital Managing Partner Aziz Hashim, about getting funding for franchise expansion.
He was speaking to Living Large columnist Poornima Apte, who details in an upcoming print edition how and when three emerging franchise brands should seek capital to foster growth, and we include Hashim’s commentary here to augment the print piece.
“An appropriate strategic partner can provide funding but perhaps, more importantly, the know-how and support so that common mistakes are avoided and growth occurs in the most fruitful way,” Hashim says. “A new franchise founder may be great at creating a brand, but it’s important to have the support of experts who have experience in brand growth and understand exit value maximization.”
Chris Conner of Franchise Marketing Systems, another expert Apte contacted, says: “Although capital is always good to an extent, there certainly are better times for the franchisor to consider taking in capital than others. It would be when a brand hits what many refer to as critical mass and they are about to turn that corner of growth.
“The right time for funding is when systems are in place to validate repeatable scale, there is an obvious growth plan where the capital will be put to use and the market is demanding more of your franchise brand,” Conner says.
Lani Dolifka, CEO of Watermill Express, heads one of the three brands featured each issue in Living Large. She told Apte she’s always relied on bank debt, in part as a way to hold herself accountable for prudent spending. Bank debt “has forced us to be very careful and conservative in how we spent our money because we have obligations to the bank,” Dolifka says. Read more in the April issue of Franchise Times.