Revenue-based financing

Revenue-based financing for franchisees: remodels, new units and working capital.

Franchisees carry royalties, brand standards and required upgrades. A revenue-based advance funds them and is repaid from unit sales.

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✓ Checking what you qualify for does not affect your credit score.

How can franchisees use revenue-based financing?

Short answer: Franchisees pay royalties and marketing-fund contributions on sales, follow brand standards and are periodically required to remodel or upgrade equipment, whatever kind of year they have had. Revenue-based financing funds remodels, equipment and new units, with payments that move with sales so a slower opening does not strain the existing locations.

Key facts

Royalties are paid on sales
Brand-required remodels arrive on schedule
New units take months to break even
Payments that flex protect existing units

The franchisee's cash pressures

Franchise owners pay royalties and marketing-fund contributions on sales, follow brand standards and are periodically required to remodel or upgrade equipment. Those costs arrive whether or not the year has been good. Multi-unit owners also need capital to open new locations, and the months before a new unit breaks even can strain the existing ones.

A revenue-based payment is calculated on sales, much like royalties, so it rises and falls with the business. That makes it easier to plan alongside existing franchise obligations.

What a reviewer reads

Sales deposits for each location, ideally in separate accounts.
Royalty and marketing-fund payments.
Required remodel or equipment schedules.
Existing franchise financing.
Performance of older units compared with newer ones.

Franchise agreement details

Some franchise agreements restrict additional financing or require franchisor consent for liens. Check your agreement and disclose anything relevant. If you operate several units, explain which location the funds are for and how the units relate financially.

Common uses

Brand-mandated remodels.
Equipment upgrades.
Opening an additional unit.
Working capital during a new unit's ramp-up.

A worked example

Illustrative arithmetic: a quick-service franchise with $95,000 monthly sales

Advance: $45,000. Repayment cap: $45,000 × 1.20 = $54,000.
Cost of the capital: $9,000, fixed in dollars from the start.
Payment: 7% of monthly revenue. At $95,000 a month that is $6,650, so about 8.1 months to reach the cap.

Every figure on this page is illustrative arithmetic in Canadian dollars. It is not an offer, a quote or a promise of approval.

Where Canadian files usually start

Monthly revenueTypically from around $20,000 a month in deposits for Canadian files. The exact line varies by funder and by file.

Time in businessTypically about 12 months. Newer businesses can be reviewed, but the options narrow.

Account healthLimited low-balance or negative days. Funders read the last few months of bank statements for this.

CreditScores from 500 are considered. A score of 600 or higher opens more options and better offers.

DocumentsA signed application and recent business bank statements, typically the last four months.

Existing advancesFiles with an existing advance can be reviewed, including second position.

Next step: apply once with a signed application and your last four months of business bank statements. The file is read for rBF for franchise owners and matched to the structure that fits, whether that is revenue-based financing, a merchant cash advance or a smaller first advance that builds history. Questions first? Call (305) 384-8391.

Sources and review

Reviewed by the Merchant Fund Express team on October 12, 2026. Official pages checked as of that date.

Common questions

Does my franchisor need to approve?

It depends on your franchise agreement. Check for clauses on additional financing or liens.

Can multi-unit owners apply for one location?

Yes. Separate accounts per unit make the review clearer.

Are royalties a problem?

No. They are read as a normal cost of the business.