# Franchise Term Loans for Operating Units

> Franchise term loans for remodels, refreshes and equipment bundles: $10K to $250K, 12 to 18 months, 0% origination, weekly payments, 15% of revenue cap explained.

Source: https://mfebusinessloans.com/franchise-funding/term-loans/ (Merchant Fund Express, updated 2026-10-21)

## The short answer

A franchise term loan from Merchant Fund Express is a fixed amount from $10,000 to $250,000, repaid over 12 to 18 months in weekly payments, with 0% origination. The amount is capped at 15% of the unit's annual revenue and the loan sits in first position. It fits a defined project in an established unit: a franchisor-scheduled refresh, a remodel or a brand-standard equipment bundle.

## What are the published term loan terms?

Amount$10,000 to $250,000
Term12 to 18 months
Origination0%
PaymentsWeekly, not daily
Size cap15% of annual revenue
PositionFirst position only
Early repaymentFull early repayment takes 50% off the remaining scheduled interest
Next stepOnce 50% is repaid, the owner may be eligible to renew into a line of credit
The generic product page is business term loans. This page covers how those terms land in a franchise unit.

## What do franchise owners use a term loan for?

A term loan suits a cost with a clear finish line. In franchise units that usually means:
Franchisor-scheduled refreshes: new signage, menu boards, flooring or seating on the system's timeline (see franchise remodeling funding).
Brand-standard equipment bundles: a set of ovens, a walk-in, a new POS rollout across the unit.
Remodels after a lease renewal, where the work is quoted and the dates are fixed.
A one-time inventory build before a new product launch from the franchisor.
For recurring short gaps, a franchise line of credit is the better tool. For a single machine with a vendor quote, compare franchise equipment financing.

## How does the 15% of annual revenue cap work for a franchise unit?

The cap is measured on the unit's own revenue, as shown by its deposits, not on system averages. A hypothetical sandwich unit deposits $19,000 a week.
Line | Figure |
Weekly deposits | $19,000 |
Annual revenue | $19,000 x 52 = $988,000 |
15% cap | $988,000 x 15% = $148,200 |
Refresh quote | $135,000 (fits under the cap and under $250,000) |
Hypothetical total interest over 18 months | $16,200 |
Total repaid | $135,000 + $16,200 = $151,200 |
Weekly payment (78 weeks) | $151,200 / 78 = about $1,938 |
Payment as share of weekly deposits | $1,938 / $19,000 = about 10.2% |
If the quote were $175,000, the unit would land above its cap. The owner would fund $148,200 with the term loan and cover the rest from cash or a separate structure.
Figures in this example are illustrations of the arithmetic, not an offer, quote or approval. Real terms depend on the file and the funder.

## How do weekly payments sit next to the royalty debit schedule?

Royalty and advertising-fund debits usually leave the account on a fixed weekly or monthly date. Merchant Fund Express reads them as normal recurring costs and sizes the term loan payment after them. Because the term loan is weekly, not daily, the owner can see both debits on one calendar and keep a cushion for payroll week.
Note the day your royalty debit posts.
Ask for a payment day that does not collide with payroll.
Keep the average balance at $5K or 10% of monthly revenue, the Tier 1 standard.
Model the payment first on the payment burden calculator.

## Who qualifies?

The term loan uses the Tier 1 requirements: 3+ years in business, FICO 650+, $300K a year or $25K a month in revenue with 8+ deposits a month, negative days at most 3 a month and 9 in 6 months, NSFs at most 6 a month and 24 in 6 months, at least 50% ownership, and no bankruptcy or foreclosure in the last 3 years. Because it is first position only, it fits a unit with no current advance. A unit that already carries an advance should read franchise funding with existing advances. Final terms depend on the business's revenue and history.

## What does early repayment and renewal look like?

Say the same hypothetical unit has $8,000 of scheduled interest left halfway through. A full early repayment takes 50% off that, so the owner saves $4,000. Once half the loan is repaid, the owner may be eligible to renew into a line of credit, which turns a one-time project loan into standing access for the next refresh or equipment failure.
Figures in this example are illustrations of the arithmetic, not an offer, quote or approval. Real terms depend on the file and the funder.

## Keep reading

Franchise business loans: Every product for existing owners, side by side.
Franchise lines of credit: Where a term loan can renew into.
Franchise remodeling funding: Refresh and remodel planning.
Term loan vs equipment financing: Which fits a single machine.
Apply for a franchise term loan: About 5 minutes, soft pull.

## Common questions

### Can a multi-unit owner get a term loan for each unit?

Each unit or entity is reviewed on its own deposits, and the 15% cap applies to each entity's revenue. See multi-unit franchise funding.

### Why weekly and not daily?

Weekly payments are easier to plan around a weekly royalty debit and payroll. Merchant Fund Express term loans are weekly by design.

### Is there an origination fee?

No. The term loan carries 0% origination.

### My unit has an existing MCA. Can I still get a term loan?

The term loan is first position only. Owners with a current advance usually look at a line of credit, which can sit in second position, or a structure that lowers the existing payment.

### How long until I have the money?

Same-day decision on a complete file; funding often the next business day.

Apply with Merchant Fund Express: https://merchantfundexpress.com/current-application.html?utm_source=mfebusinessloans.com&utm_medium=franchise&utm_campaign=franchise-funding&utm_content=term-loans