Scaling a franchise can look successful on paper while quietly draining your available cash.
In this episode of Franchise Secrets, Erik Van Horn sits down with Sherri Seiber, President of FranFund, to break down what franchise owners need to know about funding growth without running out of capital.
They discuss SBA lending, post-closing liquidity, burn rate, FDD Items 7, 19 and 20, and why both struggling and fast-growing franchise businesses can run into cash problems. Sherri explains how franchise buyers should think beyond simply funding Unit 1 and develop a strategy for Units 2, 3, and beyond. Erik also shares lessons from building 12 SOLA locations and what happened when their original SBA funding strategy suddenly changed.
Timestamps:
00:00 – Why SBA financing matters to franchise growth
02:16 – Rising loan defaults among emerging franchise brands
04:13 – Why post-closing liquidity is critical
07:12 – The financial reality first-time franchise buyers need to understand
08:23 – Using FDD Items 7, 19 & 20 to evaluate a franchise
09:58 – Understanding your burn rate and true capital needs
13:57 – The financial challenge of becoming a multi-unit "empire builder"
15:58 – How to build a funding strategy for multiple franchise locations
18:25 – Erik's real-world experience scaling to 12 SOLA locations
21:06 – What happens when your original financing plan falls apart
Connect with Erik Van Horn:
🌐 Website - https://franchisesecrets.com/
📷 Instagram - https://www.instagram.com/erikvanhorn/
👍 Facebook - https://www.facebook.com/erik.v.horn/
💼 LinkedIn - https://www.linkedin.com/in/evanhorn/
Best Franchise Starter Playlist:
https://youtube.com/playlist?list=PLEEithd54kMlgRgsBAo4LWNCMSOthnK0r&si=TD1z25-ie2d23rGm
https://youtube.com/playlist?list=PLEEithd54kMle5_OUXiuLbc_UPBtz1vTE&si=uCOgDya1VnnCarDf
https://youtube.com/playlist?list=PLEEithd54kMk2Kw07KwZGWgF8UTx9N5_T&si=ZldjBOqFanGE-JUL
#Franchising #FranchiseGrowth #Business
