Situation

Business funding for franchise owners: how it is read and what helps.

A franchise brings a proven model, a franchise agreement and fees that a reviewer accounts for.

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

How do funders read a franchise owner's file?

Short answer: A franchise brings a proven model, a franchise agreement and fees a reviewer accounts for. Franchisees pay royalties and marketing fees, often as a share of sales, so deposits are read after those fees, and the agreement may restrict additional financing. Steady location deposits and royalties paid on time help.

Key facts

Deposits are read after royalties
The franchise agreement may restrict financing
Royalties paid on time help
Remodels and new units are common uses

How this is read

A franchise brings a proven model, a franchise agreement and fees that a reviewer accounts for.

Franchisees pay royalties and marketing fees, often as a share of sales. Reviewers read deposits after those fees and may look at the franchise agreement for restrictions on additional financing.

What helps

Steady deposits at the location
Royalties paid on time
Franchisor support for the plan
Experience operating the brand

What hurts

Royalties in arrears
Agreement restrictions on financing
A location underperforming the brand average

A sensible plan

Check the franchise agreement for any financing consent. Show location deposits net of royalties and explain the purpose in franchise terms, such as a required renovation.

Illustrative arithmetic

A franchise coffee shop depositing about $75,000 a month asks for $25,000 for required equipment upgrades. At a 1.22 factor the payback is $30,500, a cost of $5,500. Over roughly 5 months that is about $290 per business day, or close to 8% of monthly deposits.

Total payback: $30,500.
Cost: $5,500.
Payment: about $290 per business day, close to 8% of monthly deposits.

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

Typical starting points

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.

One more thing that helps

Franchisors often require renovations or equipment upgrades on a schedule. Those requirements are a clear, documented purpose, which makes them straightforward requests. Bring the franchisor's letter with the application.

Practical tip

Multi-unit franchisees should present each location separately as well as combined. A reviewer can then see which locations carry the business and size a request to the location it is for. Mixing all locations in one account makes that harder.

What to send with your application

Location statements for the last four months
The franchise agreement section on financing, if any
A franchisor letter for any required upgrade

Bottom line

Bring the franchisor's requirement letter when the money is for a mandated upgrade. A documented, required purpose is one of the clearest requests a reviewer can read.

Sources and review

BDC: Business financing

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

Common questions

Do royalties reduce my eligibility?

They are part of costs. The review reads what remains.

Do I need franchisor consent?

Some agreements require it. Check before applying.

Can I fund a second location?

Yes, with a budget and the first location's results.