How to Finance Multi-Unit Franchise Growth

As of 2025, 19.3% of franchisees are operating multiple units, managing 58.8% of all franchised locations, according to FRANdata. The ability to finance this multi-unit growth is critical, as accessing sufficient capital is one of the key hurdles that franchisees face when expanding their operations. While some financing methods like cash, credit cards, and family support are common in single-unit franchises, multi-unit owners tend to leverage more advanced options, including Small Business Administration (SBA) loans, 401(k) business financing, unsecured loans, and portfolio loans.

Michael Minitelli, Chief Development Officer at Benetrends Financial, emphasizes that as franchisees shift from one location to multiple units, "financing becomes less about finding capital and more about building a long-term growth strategy.” Successful operators typically form close partnerships with funding experts and lending partners to ensure that each new location not only contributes to their overall business but also aligns with their strategic vision.

SBA loans are particularly popular among multi-unit franchise owners due to their attractive terms, which arise from the insurance provided by the SBA against loan defaults—covering up to 85% of a loan up to $150,000 and 75% for larger loans. As lenders assess potential borrowers, they analyze the performance of both individual units and the franchise system as a whole. Generally, lenders expect at least two years of profitable tax returns for the primary business, and more favorable terms can be offered to borrowers with strong credit histories, significant down payments, and relevant industry experience.

Potential franchise investors need to be aware that while SBA loans are widely applicable, eligibility can differ significantly by lender. Factors such as credit history, liquidity, and financial stability are critical components of the underwriting process. As these financing dynamics evolve, franchisees should remain vigilant about lender requirements and market trends in order to capitalize on multi-unit growth opportunities. The ability to navigate these financing avenues effectively may suggest how successful franchise operators can expand their presence in a competitive landscape.