To keep me from ranting
about the Antonio Brown saga, I have invited Bryan Jasin to be a guest
contributor to The Franchise Contrarian today. Bryan leads the Franchise
Specialty Banking Group at The Huntington National Bank in Columbus, Ohio and
serves on the Membership Committee for the International Franchise Association.
On Antonio Brown, I must say one thing: Antonio, you have given me one more
reason to hate the New England Patriots!
With that, Bryan take it
away:
As
a lender in the franchise industry, I have been party to thousands of deals. I will not claim to have seen it all, but I
have seen my fair share, then some. At
Huntington, we’ve seen the traditional start up with husband and wife manning
the new venture, the seasoned multi-unit operator opening their 10th
or 15th location, as well as silent partners looking for returns
with an industry operator. Sometimes we have
seen new businesses grow year over year and then some businesses that never get
off the ground.
The
volume of deals have provided a number of insights. In working on transactions both big and
small, there is comfort zone in the process.
Whether it is a million-dollar loan or a multi-million-dollar deal, the
lender and franchise buyer must establish a trusting, supportive relationship.
Trust breeds comfort. I always try to
remember that when working with a new franchisee, this is the biggest financial
investment they are ever going to make. With any investment decision, you want
to ensure you work with partners that have been through the loan process.
What
should you look for? Work with a bank that
has experience in your industry and a loan structure based on your
experience. A large ground up
construction financing request may play well in one institution and poorly in
others. Are you looking for capital to
start your venture? Not every bank has the risk appetite to lend into projected
revenues and startups.
So
vet your lender just as you would your new franchisor!
Often
your franchisor has relationships with banks that have experience underwriting
loans for your brand. Because the bank
probably has closed many loans for other franchisees, the loan process should
be efficient and not too difficult. I
also encourage you to see how your franchise peers structured their loans to
get started or grow. You can learn who
is good, who is not, and some good insights into loan fees and interest
rates.
Lastly,
ask lots of questions throughout the process.
Your due diligence can kill a bad deal for you or make a good deal great.
Thanks Bryan! You can
reach Bryan at 614-331-8478 or Bryan.P.Jasin@huntington.com
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