How do I get funding to open a fast food franchise shop in the UK?

By Kevin Noble – Director, Franchise Development, RBS & NatWest Franchise Team

Firstly, and without hesitation, I would recommend that a prospective franchisee approach at least one bank with a dedicated franchise team. Choosing the right Bank will save time as they should have a strong understanding of the chosen franchise and that past experience is not always a necessity.

A timely and favourable response is determined by the preparation of the key pieces of information required to assess the application. Seek advice from both professionals and the Franchisor- they have a vested interest in your successful application.

Sell yourself to the bank and ensure your first point of contact is the Bank’s Franchise team.

The Business Plan-key areas of focus:

  • Demonstrate what skills you are bringing to the table-a detailed CV.
  • The location-this is likely to be the key element of a fast food shop.
  • The start-up budget. The list must include all items such as the franchise fee, equipment, property costs and VAT.
  • The level of your cash stake. As a rule of thumb, this should be a minimum of 30% of the start-up budget.
  • Consideration as to how the funding package should look i.e. possible a mix of traditional loan finance and asset finance, noting the level of equipment required.
  • Details of your competition, how you are going to generate sales and customer interest and how you are going to retain customers.
  • Financial projections-an insight into how are you going to repay the funds provided (as well as paying the bills and your salary) and is the key to understanding what level of borrowing is right and sustainable for your business. It will also help you understand the likely impacts of changes to income and costs on your business. Do not simply rely on projections or illustrations provided by the franchisor, but undertake your own research by speaking to other franchisees in the network.
  • Your personal financial circumstances-detailed breakdown of all loans, credit cards and mortgages together with property values, savings and investments.
  • Consider whether security is available. If not, there may be other options.
  • A personal income and expenditure statement to verify what salary you need to take form the business.
  • 6 months personal bank statements – this is one of the best ways to evidence your financial acumen.

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