Raising equity for a franchise deal

by a searcher from Columbia University - Columbia Business School

1 month ago

I am looking for someone with experience in raising equity for a franchise deal. I'm trying to figure out how the timeline works. Do I sign on the dotted line, then raise the equity, or vice versa? Is an LOI type document thats seen in the space? 

In a perfect world I would raise the capital first. But I am worried about losing the opportunity. 

Its possible having all required capital up front is required in the franchise contract...but all signs from franchisor are that I don't need all capital up front at day of signing, I could be wrong... 

Interested in peoples thoughts. Thanks!

1 like
160 views
14 comments

searcher from Lewis and Clark College

Aside from any Franchisor requirements, it is the same as any other deal.

1 week ago | like reply | 0 likes

searcher from University of California, Berkeley - Haas School of Business

I'm under LOI to acquire a franchise without any investor. The franchisor doesn't begin their review and approval process until the APA with the seller is signed to avoid disclosing their proprietary information. It will take 30 days to get franchise approval and close. So I think you have time after signing the LOI to raise equity, concurrently while doing due diligence, getting financing, etc.

1 month ago | like reply | 1 like

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