Funding a new or resale franchise
Franchise finance for greenfield sites and resales.
Accredited-brand lending, fit-out finance and working capital arranged together. Your broker explains what each lender will fund and what you must contribute.
What is a franchise finance?
Franchise finance is lending used to buy a new or existing franchise, covering the franchise fee, fit-out, equipment and initial working capital. Because major franchise systems have documented performance history, many lenders apply accredited franchise lending policies with higher loan-to-cost ratios than ordinary business acquisitions.
Lenders treat franchises differently from independent businesses because the system supplies what a startup normally lacks: proven unit economics, a training program, supplier agreements and comparable store data. Where a brand is accredited with a lender, that lender may fund 50–70% of total establishment cost against a 30–50% contribution — noticeably better than the terms a comparable independent startup would see.
A new site and a resale are funded differently. Greenfield lending relies on the franchisor’s projections and network averages, with drawdowns often staged against fit-out milestones. A resale is assessed on that store’s own trading history, which is more concrete but frequently reveals why the outgoing franchisee is selling. Either way the remaining term on the franchise agreement caps the loan term — lenders will not amortise debt past the licence.
The funding is rarely one facility. A typical package combines a term loan for the franchise fee and goodwill, equipment or fit-out finance for the plant, and a modest overdraft for opening working capital. Structuring those separately usually costs less than putting everything on one unsecured loan, because each piece is priced against what secures it.
Franchise finance at a glance
| Amount | $50,000 – $3,000,000 |
|---|---|
| Term | 24–84 months |
| Rate type | Fixed or variable |
| Indicative rates (Q3 2026) | 7.5% – 15% p.a. · see rate history |
| Security | Secured by property |
| Repayments | Monthly |
| Typical speed | 2–6 weeks |
| Best for | Buyers entering an established, lender-accredited franchise system with a real deposit |
| Consider something else if | New or unaccredited brands with no network trading history for lenders to assess |
| Tax | Interest is generally deductible; the initial franchise fee is usually a capital cost. Confirm with your accountant. |
Advantages
- Accredited brands attract better funding ratios than independent startups
- Fit-out and equipment can be financed separately at secured rates
- Franchisor projections and network data support the application
Trade-offs
- Loan term is capped by the remaining franchise agreement
- Substantial cash contribution still required
- Unaccredited or new brands face far fewer lender options
How to apply for a franchise finance
- 01
Confirm the brand and site
Franchise agreement, disclosure document, territory and whether the site is greenfield or a resale.
- 02
Split the funding
Your broker separates franchise fee, fit-out, equipment and working capital so each is priced against its own security.
- 03
Approve and stage drawdowns
Funds are released against fit-out milestones or at settlement for a resale, then trading begins with the working-capital facility in place.
Documents lenders commonly ask for
- Franchise agreement and disclosure document
- Franchisor projections, or the store’s trading history for a resale
- Personal statement of position, ID and evidence of contribution funds
Lenders we compare for this
Westpac, NAB, ANZ, Banjo and others on our panel. See the full panel.
Estimate your repayments
- Number of repayments
- 48
- Total interest (est.)
- $16,305
- Total repaid (est.)
- $91,305
This calculator provides an estimate only and does not account for fees, charges or the specific terms a lender may offer. It is not financial advice or an offer of finance.
Key terms
What is franchise finance?
Franchise finance is business lending used to acquire and establish a franchised outlet. It funds the initial franchise fee, fit-out, equipment and working capital, and is assessed against the franchise system’s documented performance as well as the applicant’s position.
What is an accredited franchise system?
An accredited franchise system is a brand a lender has already assessed and approved, allowing applications from its franchisees to be processed under pre-agreed lending parameters. Accreditation usually means higher funding ratios and faster decisions.
How much deposit do you need for a franchise?
Franchisees typically contribute 30–50% of total establishment cost from their own funds. Where the applicant offers residential property security, the required cash contribution can be lower and the term longer.
Franchise finance FAQs
Can I use a business loan to buy another business?
Yes, acquisition finance is available, though lenders assess it more closely than a working capital loan. They typically want the target business financials, the sale contract, a handover plan and evidence you have relevant experience. Goodwill on its own is difficult to lend against, so many deals combine a cash deposit, vendor finance and a loan secured by property or the acquired assets. Franchise purchases are often assessed against the franchisor system rather than the individual site.