The most common barrier to expansion faced by many small businesses is lack of access to capital. Even before the credit-tightening of 2008-2009 and the “new normal” that ensued, entrepreneurs often found that their growth goals outstripped their ability to fund them.
Franchising, as an alternative form of capital acquisition, offers some advantages. The primary reason most entrepreneurs turn to franchising is that it allows them to lower expansion risks. Typically, the franchisee provides the capital required to open and operate an outlet, while the franchisor provides the proven system, recognized branding, and related support. This lowers the risk for both.
Area Developers purchase the rights to develop franchises in certified opportunity zones in exchange for a share in the proceeds of both the sale of the franchise and the ongoing royalty stream. The Loyalty Opportunity Fund will invest in area development of tax prep franchises focused on serving the Hispanic/Latino community.