Should Your LLC or Corporation Buy a Franchise?

Ever thought about owning a franchise? In many cases, you can establish a corporation or form an LLC and own franchises under the name of your corporation or LLC. You can even get an initial loan from the Small Business Administration (SBA). There are so many franchises that your corporation or LLC could buy. Let’s take a look at a few, as well as loan information provided by the SBA.

The Small Business Administration has distributed $ 391.8 million in loans to small business owners seeking to franchise a Metro. I was surprised to learn that Subway is one of the largest fast food chains in the world, with almost 33,000 restaurants in 91 countries. Why would Subway be attractive to your LLC or corporation? For starters, it has a low starting fee of $ 15,000 and a low loan default rate. The Small Business Administration has kept statistics on loan default rates by franchise, and Subway has a default rate of 7%. The SBA sees a much higher default rate for airships (46%).

Cold Stone Creamery was acquired by Khala Corporation in 2007. But is it a good investment for your company? The ice cream brand that started in Tempe, AZ, more than two decades ago, now has more than 1,400 locations. Start-up is not cheap. The initial franchise fee is $ 42,000, and in the past decade nearly one in three SBA-backed loans defaulted.

Who doesn’t love Blizzard goodies? If you had your heart set on the ice cream business, Dairy Queen is one of the safest investments for your LLC or corporation. Berkshire Hathaway, the company run by famed investor Warren Buffet, acquired the 70-year-old company in 1998 and grew it to 5,700 locations around the world. Your initial franchise fee will cost you $ 35,000, but according to the SBA, the loan default rate is a low 8%.

Not sure if the food industry is right for your corporation or LLC? How about a Super 8 motel? It will cost you much more to get inside than an ice cream parlor, the average SBA loan is over $ 900,000. But it has one of the lowest failure rates (4%) according to the SBA. Interesting note: there are some franchises that have a 0% default rate on SBA-backed loans, and the majority are hotels and motels. Where did Super 8 get its name from? When the chain opened in 1974 in Aberdeen, SD, it was offering a room for $ 8.88 per night.

Do you think your LLC should go physical? Consider curves for women. Since opening the first locations in Texas in 1992, Curves has grown to 10,000 locations in 70 countries. The “no makeup, no men and no mirrors” philosophy placed the number one franchise on Entrepreneur magazine’s annual “fastest growing franchise” list in 2003 and 2005. Sadly, given that fitness is an article by luxury, it didn’t even make it to the top ten this year.

So there you have it. We’ve looked at franchises where you can eat, sleep, and get fit. But there are many more to choose from, many with reasonable initial franchise fees and solid success rates that may be perfect for your LLC or corporation.

For more information on LLC formation, click here:

Add a Comment

Your email address will not be published. Required fields are marked *