Financing, namely corporate financing channels. It can be divided into two categories: debt financing and equity financing. 
Debt financing, including bank loans, issuance of bonds and notes payable, accounts payable, the latter mainly refers to equity financing. Constitute debt financing liabilities, companies agreed to repay the principal and interest, creditors generally do not participate in corporate management decisions, the use of funds has no decision-making power. 
Debt financing can be divided into working capital financing and capital expenditure financing, its advantage is to borrow money and have repayment ability when appropriate repayment to creditors. The main channels of debt financing have friends, banks and other financial institutions. Debt financing working capital (current assets - current liabilities) is generally borrow short-term debt, purchase inventory to pay accounts payable, if the franchisor must give employees a raise to increase inventory and to achieve higher sales and profits, this financing often very appropriate way and necessary. 
Working capital debt financing is generally obtained from bank loans, commercial credit cooperatives or credit unions, which are short-term. Capital expenditure and financing (land, buildings, equipment and fixed assets), is obtained by signing long-term debt contracts. When franchise business startup market expansion or restructuring, in particular, to finance capital expenditures. The main channels of financing capital expenditures commercial banks, venture capital, manufacturers, insurance companies and other commercial lenders. Debt financing usually have bank loans, equity financing, debt financing and finance lease ā etc.. More suited to the current domestic franchise business bank debt financing is regular (mortgage) loans and finance leases. Franchisor according to the requirements of different types and to obtain funds needed to improve the business or expanding markets. 
1 bank term loan 
Banks are the most important franchise business financing channels. According to the nature of the funds can be divided into working capital loans, fixed asset loans and special loans categories. Special loans usually have a specific purpose, which is generally more favorable lending rates, loans are divided into credit loans, secured loans and bills discounted. Among them, the regular (pledge) bank loan is a formal contract signed with the franchisor, franchisor agreed to pay interest at a given percentage of a particular period of time (the loan term) to use a certain amount of capital (principal) and. Such loans generally require the return of part of the principal and interest on a monthly basis, allowing the use of loan repayment or payment methods, namely, to repay part of the loan principal only, a large amount of loan repayment at maturity. Typically, such loans generally require collateral (land, buildings, property, equipment or other fixed assets), if the franchisor is not required to repay the bank will confiscate the collateral. 
2. finance lease 
Finance leases, also known as financial leasing, is a new mode of operation, product marketing and asset management, but also a way of assets of financial intermediation. It is a lending relationship between ownership and use rights, namely the lessor (owner) within a certain period of the lease leased to the lessee (the user) to use, press the tenant lease installments paid to certain provisions of the lease fees, expiration obtain ownership of the leased property. Finance lease is actually a form of financial matter to achieve the purpose of financing. For small and medium franchise companies, financial leasing is a combination of financing and financial matter, a set of trade, finance, lease as a whole, the operation more flexible, simple, and to improve the effectiveness of corporate financing and financing is very effective mode of financing. There are commonly used operating leases, finance leases or installment sale and leaseback and other means. 

Equity financing is pointing to other investors to sell the company's ownership, that is the owner's equity in exchange for money. This will involve the company's partner, between owners and investors dispatch operations and management responsibilities of the company. Equity financing allows companies to founder without having to use cash return other investors, but share the profits with them and assume management responsibilities, the investor share in dividends in the form of corporate profits. The main channel of equity capital has its own capital, friends and relatives or venture capital firms. In order to improve the business or to expand, the franchisee may use a variety of equity financing to obtain the capital required. 
Venture Capital 
When a developing franchisor require additional capital to make his business plan to be successful, but the lack of collateral or when the relevant skills and qualifications to also pay the principal and interest, or royalties people want to be traditional debt financing from a commercial bank and the franchisor also needs to prove he can still pay principal and interest when the franchisor may seriously consider the risks of investment, one of the sources of financing for the company. But the real problem is that the franchisor needs to face: As the franchisor needs capital to cover "soft costs" - including personnel costs and marketing costs, the franchisor may be difficult to obtain debt financing. However, as the franchise has become a successful business model of domestic enterprise development, more and more private investors and venture capital firms are willing to provide capital for the franchisor. For example: domestic hot pot restaurant chain Little Sheep brand and economy chain hotel brand such as home, just to get venture capital funding in 2006. 
However, the requirements for risk fund is also very demanding, they are always trying to find those enterprising, life and mode of operation are positive and enterprising entrepreneurs. 
In addition, venture capital is often required to hold a certain amount of equity franchise companies asked to participate in the Board requires the franchisor to provide a detailed report, setting out the business development plans, financial planning, product features, management's ability. On the capital structure, but also requires corporate management must invest a certain percentage of funds, generally 25 # M ~ T ^ about 02 to restrict management's commitment to the enterprise. 
2 Partner 
This is one of the channels in the early development of the franchisor common financing. A prerequisite for the establishment of the partnership are: a partner willing to work together and agree to put some of the initial capital expenditures for the expected. When insufficient partnership property to repay debts, but all the partners promised unlimited joint liability; each partner equal rights to execute the partnership affairs. This form of partnership, based on partnership law, a partnership can only be established by means of an unlimited partnership, all partners must assume unlimited liability for the partnership, whereby all partners only as a general partner of the partnership's debts jointly and severally liable unless no investment or involvement of other economic activities. According to regulations, business decision to go through the consent of all partners. Any general partner can become franchisees franchise system. All partner companies take full responsibility for all debts and promised to actively participate in the management of the enterprise, then the profits are taxed. 
Another way is a partnership limited partnership. Limited partners only limited to the amount of investment or commitment to corporate debt agreed to take risks, the benefits resulting profits can share and enjoy personal tax benefits. If the limited partner does participate in business management, this partnership itself into a general partner.