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- 💰 Franchise Financing Just Got Easier
💰 Franchise Financing Just Got Easier
SBA Directory returns June 1, replacing multiple addendums with a single certification
Chris Wright
May 08, 2025
Welcome to Franzy Five, the 5-minute weekly summary of franchise news 👋.
This Week's Franzy Five:
🏛️ SBA Directory Comeback Makes Franchise Loans Easier
The SBA's Franchise Directory is making a triumphant return on June 1 after its controversial 2023 elimination, sparking celebration across the franchise world. This golden ticket to faster financing approval represents a massive win for franchisees who've faced heightened lending scrutiny and processing delays during the directory's two-year absence.
Key Highlights:
One-time certification replaces the cumbersome loan-by-loan addendum requirement, slashing paperwork and significantly accelerating the financing process.
July 31 deadline looms for approximately 8,000 previously-listed franchisors to submit new certificates or face removal from the registry.
Lender enthusiasm is palpable, with some banks having stopped franchise financing altogether due to eligibility confusion after the 2023 directory discontinuation.
Additional policy reversals accompany the directory's return, including restored upfront lender fees, 10% equity injection requirements for businesses under two years old, and tightened citizenship verification.
👉️ Why It Matters:
For franchisees, this change means faster approvals and broader lender options when seeking SBA funding. For franchisors, particularly emerging brands, the directory offers a critical stamp of legitimacy that can make or break growth plans. As IFA General Counsel Sarah Davies puts it, "The efficiency it creates in the loan process when franchisees go to lenders is important."
🎓 TCU Classroom Project Becomes Franchise Reality
Two TCU seniors transformed a class assignment into actual franchise ownership when they purchased a Jimmy John's near campus before receiving their business degrees. Ty Vansteenburg and Nate Meyer, Minnesota natives and roommates for four years, leveraged an Introduction to Franchising course to jumpstart their entrepreneurial journey.
Key Highlights:
Classroom connection came through TCU professor and Unleashed Brands CEO Michael Browning, who had students analyze franchise disclosure documents and unexpectedly watched these particular students pursue actual ownership.
Opportunity knocking happened when the pair discovered a campus-area Jimmy John's location was ending its franchise agreement, creating an opening they couldn't ignore.
Family foundations prepared both students, with Vansteenburg working in his father's Jimmy John's franchises since age 14 and Meyer inspired by his grandfather's business success in Minnesota.
Graduation freedom arrives May 10, with Meyer noting he's "excited to be done... and kind of put 100% of my efforts into the business" as they explore potential additional franchise opportunities.
👉️ Why It Matters:
Traditional franchise financing often excludes younger applicants who lack substantial capital and long credit histories. Success stories like this could prompt franchisors and lenders to develop specialized programs for promising graduates, potentially opening an entirely new demographic of owners at a time when many systems struggle with franchisee recruitment.
🌊 Economic Chaos Drives Franchise Expansion
Amid stock market gyrations and sweeping tariffs, franchising is experiencing a counterintuitive surge as displaced corporate workers seek shelter in the storm. This flight to proven systems is driving franchise growth toward a projected 851,000 US establishments in 2025, a remarkable 10% jump from pre-pandemic levels.
Key Highlights:
Corporate exodus accelerates as over three-quarters of a million people lost jobs in 2024 (the highest rate in 15 years) with first-quarter 2025 continuing the bloodbath across private and public sectors.
Domestic manufacturing advantage gives many US-made franchise products natural insulation from tariff impacts, with forward-thinking brands actively expanding local supplier networks.
Home services goldmine continues with Harvard University research projecting rising homeowner spending on upgrades and repairs through 2026, extending pandemic-era momentum.
Regret factor haunts many would-be entrepreneurs who waited too long, with many successful owners in their 50s echoing the same lament: "I wish I'd started a decade earlier."
👉️ Why It Matters:
The franchise model provides proven systems, established brand recognition, and collaborative support networks becomes particularly compelling during economic whiplash. For the wave of mid-career professionals suddenly finding themselves jobless, franchising offers not just a financial lifeboat but also the psychological reassurance of controlling your own destiny when corporate loyalty has proven a one-way street.
🌎 American Brands Set to Conquer Global Markets in 2025
U.S. franchise systems are expanding their global reach in a significant way, according to new industry forecasts. The International Franchise Association reports that American brands will increase their international footprint by 12% in 2025, marking a substantial growth phase for franchising beyond domestic borders.
Key Highlights:
50,000-unit threshold will be surpassed by U.S. franchise brands operating internationally in 2025, representing a major milestone for American franchise concepts abroad.
Asia and Latin America emerging as key growth regions, with these markets showing particular receptiveness to American franchise concepts and business models.
Improved cross-border regulations are supporting this expansion, making it easier for U.S. brands to navigate foreign markets and establish compliant operations.
👉️ Why It Matters:
International growth provides franchisors with diversification opportunities at a time when many brands are looking beyond the mature U.S. market. These expansion trends indicate growing global acceptance of the franchise business model and recognize the strength of American brands in international markets.
✂️ Snippets
🚽 Portable Restroom Trailers Launches Premium Franchise Program
Portable Restroom Trailers, an Inc 5000 leader in the sanitation industry since 2007, has launched its first franchise program for established companies looking to join its proven business model. The new opportunity includes comprehensive training and marketing support, with CEO Teri Pahon highlighting that franchisees can launch within approximately 90 days of signing. (Source: Fox44 News)
☕ Starbucks Reverses Course on Tech, Bets on Baristas Instead
Starbucks is making a dramatic U-turn back to human connection under CEO Brian Niccol, pausing its Siren Craft System deployment and rolling out headcount increases to 3,000 stores. Niccol told investors Wednesday that equipment and tech alone don't solve customer experience problems - people do, while admitting humans cost more but banking on growth from the investment as the chain returns to its "third place" roots with handwritten cup messages and ceramic mugs. (Source: The Hustle)
👨👩👧👦 Taco John's Heir Shares Multi-Generational Success Formula
Second-generation Taco John's franchisee Brian Fuder credits three strategies for family business success: prioritizing community connections, tapping into generational knowledge, and balancing tradition with innovation. "Embracing everyone's strengths and always prioritizing the people who build your business up makes success even more satisfying," says Fuder, who began working in his family's business at age 11. (Source: Franchising.com)
🥪 Subway Footprint Shrinks Below 20,000 US Locations
Subway's domestic restaurant count has fallen below 20,000 for the first time in two decades, closing a net 631 stores in 2024 and shedding nearly 7,600 locations since its 2016 peak. Despite the contraction, the chain remains America's largest restaurant chain by unit count while pursuing aggressive international expansion, securing commitments for 10,000+ new global restaurants and focusing on nontraditional venues like Walmart and college campuses. (Source: NY Post)