What are the biggest challenges for opening a new business in 2025? Many say the hurdles include real estate and borrowing money.
I had the privilege of moderating a webinar last month with three professionals whose expertise is helping new small-business owners get their doors open faster. Joining me were John Palumbo, Sr. Director of Franchise Development, A&W Restaurants; Ali Kraus, vice president of marketing, Benetrends Financial; and real estate broker Ty Brewster.
Ty shared that site selection is the first critical item for any franchise business. The key is putting in the right amount of work and having the right people on your team to ensure that you select a location where you can find success and where your customers exist. If you don’t have the right site, it’s difficult to make the entire project work profitably. Ty also stated that site selection challenges are currently very different in urban versus suburban and rural parts of the U.S.
Franchisees should expect to have a franchisor who will help navigate the real estate challenges in their market. Whether purchasing real estate or signing a lease with a landlord, most new small-business owners aren’t prepared to fly solo yet in these negotiations or deal with permits and construction contractors.
Ali discussed the funding options available for franchisees, including a 401k rollover plan (ROBS) and loans via the Small Business Administration. Regardless of the funding direction the franchisee chooses, it’s usually not an option to just go to their hometown bank to get business loan.
Working with their franchisor and a third-party funding specialist is the better and faster way to get their business open. The banks may also have an appetite for specific franchise brands. It often comes down to the relationships already in place between the funding solution, the bank and the franchisor. Ali also shared that another early critical piece to the puzzle is to have a business plan in place.
The team wrapped up the webinar with a reminder that it is crucial to understand all of the costs related to real estate and construction before getting your funding in place. The biggest risk is that you may end up underfunded, without real estate, and greatly delayed in starting your small business. Start your collective real estate and funding conversations early!
Jack Monson
Jack Monson is the host of Social Geek, home of the No. 1 podcasts in franchising and the CEO of Brand Journalists. He has been working with franchises brands and small businesses in marketing for 15 years. socialgeekradio.com