Daniel M. Janssen quoted in article, “Quarter of Franchises Default on SBA Guaranteed Loans”Loans.org 11/19/13
Following is an excerpt:
Daniel M. Janssen, the National Head of the Quarles and Brady Franchise Law Team, said that a prospective franchisee should have a cache of their own money invested into his or her business, alongside financing.
“Government-sponsored programs, such as the SBA, are often willing to take greater risk in funding a startup business,” he said. “But the franchisee should expect that these dollars may also come at a higher cost, in terms of fees and interest rates.”
Of course this cost can be mitigated by a business’ success. One upcoming industry that will be successful in Janssen’s estimation is the new healthy fast food industry.
“Health conscious consumers are demanding natural and healthy alternatives to more traditional franchised offerings,” he said. “Frozen yogurt franchises such as Pinkberry and Red Mango are expanding in existing markets and are experiencing tremendous growth in new markets.”
Even though the healthy fast food industry is poised for growth, some experienced industries still see many of their franchisees fail at business and default on SBA loans.
Originally published in Loans.org, November 19, 2013