Yes - you can use business funding to pay a franchise fee, the upfront payment a franchisor charges to grant you the rights to their brand and system. Because the fee is due before the location earns anything, most owners cover it with funding rather than draining personal savings. The Broker Shop is a funding broker, not a lender - you apply once and we match you to the lenders whose guidelines you meet.
What is a franchise fee, and why fund it?
A franchise fee is the one-time, upfront cost a franchisor charges for the right to open and operate under their brand, plus access to their training, systems, and support. It is separate from the ongoing royalties you pay later. Fees vary widely by brand, and they are typically due at signing - long before your doors open or your first sale lands.
That timing is the whole problem: you owe a large sum up front with zero revenue yet. Funding bridges that gap so you can secure the franchise, complete the buildout, and keep working capital in reserve for the slow opening weeks instead of spending every dollar you have on the fee alone.
Which funding products fit a franchise fee?
For a defined, one-time cost like the franchise fee, a term loan is a natural fit - you receive a lump sum and repay it over a set period. Many franchise buyers also look at SBA loans, which are popular for franchise purchases because franchises are an established, lower-risk model in lenders' eyes; the tradeoff is a longer, more document-heavy process.
If you need to move faster than an SBA timeline allows, or you want flexibility for buildout and early operating costs too, a line of credit or revenue-based financing can fund more quickly. Many owners combine products - one to cover the fee, another to fund the buildout and first months of payroll. Our funding options overview compares the tradeoffs.
How do you qualify to fund a franchise fee?
Because a brand-new franchise has no revenue history yet, lenders lean more on your personal credit, your available collateral or down payment, and the strength of the franchise brand itself. A well-known franchise with a documented track record can make an approval easier. Expect to sign a personal guarantee on most startup funding.
Come prepared with the franchise disclosure documents, your franchise agreement, a simple business plan or projections, and your personal financial details. See documents needed for business funding for the full checklist, and how much can I borrow to gauge a realistic amount. Advertised funding runs from $5,000 to $2 million depending on the deal.
How does The Broker Shop help franchise buyers?
New franchisees often don't know which lenders even work with startups or their specific brand. Instead of guessing, you send us one 2-minute application and we shop it to the lenders whose guidelines you meet - including ones comfortable with franchise financing. You compare the strongest offers and choose the structure that fits your fee, buildout, and reserve needs.
It is free to apply, and checking your options won't affect your credit score, so you can line up your funding before you sign the franchise agreement.
See what you qualify for
One 2-minute application is matched to the lenders whose guidelines you meet. It's free, and checking your options won't affect your credit score.
See What I Qualify For →The bottom line: A franchise fee is due before you earn a dollar, so funding it is normal - one application to The Broker Shop matches you to the lenders whose guidelines you meet, free and with no impact on your credit to check.