After helping specialty finance companies, banks, private equity firms and companies deal with complex financial transactions for many years, I look forward to sharing my thoughts on how innovative legal structures and technology can be part of the solution to get money flowing.  To flow, money needs accurate and reliable data and transparency.  In the last credit cycle, money and data flowed with “documents to follow.”  But the documents were not there when enforcement was required. 

Today, lenders will require that the documents remain “linked” to the data and are always accessible. The key is to reduce the risk to the lenders by better structured deals, franchisor support and document transparency.  I will keep you posted on the outcome of the IFA Summit as it has the potential to lay the foundation for a new approach to get the money flowing.

The franchise industry has entered the era of competition for capital. The economic and regulatory climate have restricted access to capital and severely limited franchise system growth.  Only the franchise systems that are attractive to lenders will prosper in the new era.  To attract capital, franchisors have to bridge the gap with the lenders. 

To get the money flowing again, franchisors must see their system from the eyes of the lenders. Franchisors must show lenders that their system is designed to reduce credit risk and provide on-going support for franchisees.  In addition, franchisors must assume some responsibility for the risk of default by their franchisees to entice lenders to fund.

To help bridge this gap, we are conducting a survey that focuses on growth plans of restaurant companies, capital needed to finance this growth, the types of support they provide to lenders and what system changes are being considered to make them more attractive to lenders.

Please make your voice heard on this critical issue to the entire franchise industry. Please go to www.vericomply.com/survey to take 5 minutes to complete this survey. With your input we can all help get the money flowing again.