ABSTRACT
This chapter provides readers with a guide to financing a microfranchise in the start-up phase as well as during different periods of growth. It discusses elements that traditional franchising and microfranchising have in common and the areas in which they differ. The chapter explores how the traditional franchising business model has been translated to a new context and how financing issues—particularly start-up financing issues—have been altered and adjusted in that transformation. It includes several case write-ups that illustrate how existing organisations approach and secure funding. The chapter describes traditional franchising and microfranchising to highlight their different foci on profit and social benefit and where the costs of doing business differ between the two models. It illustrates that while the categories of expenses are similar, the scale and scope of the expenses within those categories differ significantly. The chapter also illustrates that micro-franchises are typically smaller and less expensive to enter than the traditional franchise counterparts.
