Mr Gatti's Pizzza was listed eighth in Global Franchise's "The Power List- 26 franchisors to follow in 2024".
Access to funding is critical to starting any business - especially for one with as many components as an entertainment franchise. To stand out in the family entertainment center (FEC) market, entrepreneurs should ensure their offerings are unique and more enticing than their competitors’. Yet, doing enough to be distinctive often takes a significant investment, in addition to all the other operational costs that must be accounted for, like providing high-quality food.
Thankfully, finding the necessary funding for a family entertainment center franchise can be done in a number of ways. A variety of loans and financial incentives are available to entrepreneurs who need additional funding to build and launch their FECs. In this blog, we’ll explore the avenues that prospective franchise owners can choose so they can get their new FEC venture started quickly and successfully.
The Small Business Administration (SBA) offers a loan program that is one of the most commonly utilized in the entertainment franchise industry. SBA loans can give qualified entrepreneurs the money they need with favorable terms. These terms limit business owners' chances of difficulty paying back the SBA loan.
It’s important to note that the SBA does not administer loans itself. Instead, the SBA guarantees a portion of the loan amount for a lending partner. The lending partner then provides the funding after approval. The SBA 7(a) loan is one of their most popular options because it grants funding up to $5M for qualified candidates.
Entrepreneurs who own a pre-tax retirement account(s), like a 401(k), can use those funds to start a new FEC business. Using Rollovers as Business Startups (ROBS) enables individuals to roll existing retirement funds into a new 401(k) and invest in shares of their new business.
The funds used in ROBS are penalty-free and not considered a loan, making it possible to fund a business without debt or reducing the total debt taken on. Entrepreneurs who choose a ROBS plan will create and maintain it with a third-party ROBS administrator. Franchise owners often utilize both SBA loans and their ROBS plans to secure the funding for a new business. ROBS plans are particularly useful because they can meet the lender requirements for non-borrowed equity injection and post-close liquidity.
Entrepreneurs with a greater interest in running the day-to-day operations of an FEC business rather than focusing on the financial aspects can partner with another candidate who prefers to focus on the investment and balance sheet. The operator can also invest some of their funds into the new business, but usually, the investor handles most of the initial costs.
Generally, the operator is based geographically close to where the FEC is opening and can work to create an environment that resonates with the local community. A leading franchise brand may be able to help pair operators with investor candidates.
Economic Development Corporation (EDC) incentives provide financial assistance to qualified businesses from federal, state, and local government bodies. Governments are motivated to offer this to attract and retain business activity in their area to boost job availability and economic growth. EDC incentives can take the form of:
Entrepreneurs will need to apply and determine if they are eligible to receive the EDC incentives offered by government bodies in their market.
Curious about the level of funding needed to start an FEC with strong growth potential? Contact the Mr Gatti's team today, and we’ll share the financial qualifications to be a franchisee and discuss pertinent financing options!
Access to funding is critical to starting any business - especially for one with as many components as an entertainment franchise. To stand out in the family entertainment center (FEC) market, entrepreneurs should ensure their offerings are unique and more enticing than their competitors’. Yet, doing enough to be distinctive often takes a significant investment, in addition to all the other operational costs that must be accounted for, like providing high-quality food.
Thankfully, finding the necessary funding for a family entertainment center franchise can be done in a number of ways. A variety of loans and financial incentives are available to entrepreneurs who need additional funding to build and launch their FECs. In this blog, we’ll explore the avenues that prospective franchise owners can choose so they can get their new FEC venture started quickly and successfully.
The Small Business Administration (SBA) offers a loan program that is one of the most commonly utilized in the entertainment franchise industry. SBA loans can give qualified entrepreneurs the money they need with favorable terms. These terms limit business owners' chances of difficulty paying back the SBA loan.
It’s important to note that the SBA does not administer loans itself. Instead, the SBA guarantees a portion of the loan amount for a lending partner. The lending partner then provides the funding after approval. The SBA 7(a) loan is one of their most popular options because it grants funding up to $5M for qualified candidates.
Entrepreneurs who own a pre-tax retirement account(s), like a 401(k), can use those funds to start a new FEC business. Using Rollovers as Business Startups (ROBS) enables individuals to roll existing retirement funds into a new 401(k) and invest in shares of their new business.
The funds used in ROBS are penalty-free and not considered a loan, making it possible to fund a business without debt or reducing the total debt taken on. Entrepreneurs who choose a ROBS plan will create and maintain it with a third-party ROBS administrator. Franchise owners often utilize both SBA loans and their ROBS plans to secure the funding for a new business. ROBS plans are particularly useful because they can meet the lender requirements for non-borrowed equity injection and post-close liquidity.
Entrepreneurs with a greater interest in running the day-to-day operations of an FEC business rather than focusing on the financial aspects can partner with another candidate who prefers to focus on the investment and balance sheet. The operator can also invest some of their funds into the new business, but usually, the investor handles most of the initial costs.
Generally, the operator is based geographically close to where the FEC is opening and can work to create an environment that resonates with the local community. A leading franchise brand may be able to help pair operators with investor candidates.
Economic Development Corporation (EDC) incentives provide financial assistance to qualified businesses from federal, state, and local government bodies. Governments are motivated to offer this to attract and retain business activity in their area to boost job availability and economic growth. EDC incentives can take the form of:
Entrepreneurs will need to apply and determine if they are eligible to receive the EDC incentives offered by government bodies in their market.
Curious about the level of funding needed to start an FEC with strong growth potential? Contact the Mr Gatti's team today, and we’ll share the financial qualifications to be a franchisee and discuss pertinent financing options!
Mr Gatti's Pizzza was listed eighth in Global Franchise's "The Power List- 26 franchisors to follow in 2024".
Pizza Marketplace has selected Mr Gatti's Pizza as one of the top brands in our 2024 list of the industry's Top 100 Movers & Shakers. The complete list of winners with final rankings will be revealed at a special dinner party and awards celebration from 7:00-8:30 PM on March 19 (at the end of Day […]
How to Fund a Leading Pizza and Entertainment Franchise Access to funding is critical to starting any business - especially for one with as many components as an entertainment franchise. To stand out in the family entertainment center (FEC) market, entrepreneurs should ensure their offerings are unique and more enticing than their competitors’. Yet, doing […]
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