Franchise financing: how far your cash goes

One common option is an SBA 7(a) loan, a bank loan partly backed by the US government. If the business is brand new, the SBA wants you to cover at least 10% of the full project cost yourself. That portion is your equity injection, the money you contribute that doesn't come from borrowing (SBA lending rules). The loan can go up to $5,000,000 (SBA).

Those two rules combined decide the maximum for every cash amount.

Keep in mind these are upper limits, not guarantees. You and the lender negotiate the interest rate on a 7(a) loan (SBA). So two people bringing identical cash might face different monthly bills.

Our reach tool takes the cash you enter and shows the biggest project a 7(a) loan could support, using the SBA's 10% rule and its $5,000,000 loan limit. Say you've saved $100,000: the tool would point you to a project costing as much as $1,000,000, with $900,000 of it borrowed.

But it can't say whether a lender will approve you, or what rate you'd get. It doesn't know your credit score, which the FTC lists as one of the key questions to answer before you borrow. Use the number to narrow down which brands fit, not as a green light. To understand the loan in more depth, read our guide to SBA loans for franchises.

Franchisors are legally required to hand you a Franchise Disclosure Document, the FDD for short. It's a lengthy legal document laying out the brand's costs and rules in numbered parts called Items. Item 7 estimates your full opening spend, and the law says it has to build in working funds covering at least the first three months of running the business (federal franchise rule).

Here are three brands' estimated opening costs from their 2026 FDDs, alongside their initial franchise fees and ongoing royalties, the share of sales paid to the franchisor.

Say you have $50,000 and a lender approves you. Under the 10% rule your ceiling is a $500,000 project, with $450,000 borrowed. That covers the whole range for Great Clips and Home Instead, and nearly all of Jiffy Lube's; only a service center at the very top, up to $510,000, would need more of your own money.

Item 10 of the FDD must also state whether the franchisor provides financing itself (federal franchise rule). Check it before deciding a bank is the only path. Our Item 7 guide breaks down what goes into that opening total.

No. The Federal Trade Commission states plainly that getting a bank to approve your franchise loan is no sign the franchise is a sound investment (FTC). So look at the business on its own merits, not just whether someone will lend you the money.

The FTC recommends answering three questions before moving ahead: do you need financing, where will it come from, and what is your credit score (FTC).

Item 19 is where to look for any earnings figures the brand publishes. Our brand pages show whether those figures are available and link to the FDD so you can read them in context. Our Item 19 guide walks you through the numbers, and our cost comparison lets you weigh brands against each other.