Financing Your Franchise Purchase

1. Financing Your Franchise Purchase

2. Starting a business by purchasing a franchise is one of the easiest ways to become a successful entrepreneur. Obtaining financing for your franchise is not much different than attempting to fund other types of business startups. The same types of financing are available to you, including traditional loans, Small Business Administration (SBA loans) and funding using a self-directed 401k account. In fact, you may be able to get up and running very much more quickly with a franchise when you learn how to access your 401k retirement accounts in a manner where you won’t incur any payment penalties or additional taxes.

3. Misconceptions abound about why using self directed 401 k accounts are not feasible to finance your franchise. Some entrepreneurs automatically believe that because they are younger than 59-1/2 that they will incur an IRS penalty when they take a withdrawal from a qualified pension account. Yet, if you do the withdrawal in the right manner, you won’t incur any fines or fees whatsoever. Deciding how to gain access to your retirement money is crucial to avoid these fees and penalties. Essentially, you need to rollover the funds into a ROBS (Rollover as Business Start-Ups) accounts. DRDA’s ROBS is called BORSA (Business Owners Retirement Savings Account), which provides you with a complete slate of services to help you start your business and make sure that you meet annual federal reporting and trust accounting requirements, along with a variety of accompanying the paperwork. With a BORSA account, DRDA takes care of all of the necessary paperwork to meet annual confirming requirements.

4. Why the Financing Misconception Exists Although you own a franchise business, you are required to operate your company according to the procedures and restrictions set forth by the franchisor in the franchise agreement. Typical limitations include the products or solutions offered, pricing and geographical territory. You’ll also be required to pay an initial franchise fee, as well as ongoing royalties and advertising costs. These financial requirements can confuse people, leading them to think that the franchisor controls all monetary aspects of the operation. They perform not really. In truth, the business organization you choose may very well steer you toward learning how to access your 401k accounts to help you fulfill the monetary obligations required for becoming part of the business. A personal aimed 401k account is one of the most viable methods to secure the money needed to start a business.

5. The Advantages of Buying a Franchise • Buying a franchise allows you to go into business for yourself, but not necessarily simply by yourself. You will have a support system from the outset and most franchisors provide new owners with the training required to follow their business model. A well-established business model makes operating your procedure easier because you will operate based on methods and methods that are already successful and involve risk when using your self described 401k account.

6. Other advantages of buying a franchise include: • Considerably less risky than starting a business from scratch • Proven higher rates of success through higher brand awareness • Pre-opening support that includes site selection, design, construction and more • Ongoing support such as operational assistance increased spending power and gain access to bulk purchasing • You may find it easier to finance business because it often costs much less to buy a franchise than to begin your own business of a same or similar type

7. Funding Your Franchise With a Self Directed 401k Account Although many franchise opportunities require less investment capital and thereby make it simpler to get small business loans, it still makes sense to fund your venture with our self directed 401k BORSA account. Financing your franchise business through our personal directed 401k plan is quicker and less difficult than you believe as we take care of most of the work for you. In most cases, you’ll receive your money in about three to four weeks. The time varies depending on the state where you do business, as some state governments consider longer than others to complete the paperwork.

8. BORSA’s Five Steps As an experienced self-directed 401k provider, DRDA makes the easy function of using your cash from your IRA or other qualified pension funds and putting it to work for you without charges or excessive taxes. If you possess approximately $50,000 in certified retirement accounts, we can help you be on your way to getting a business owner. Simply ask us which of your accounts will qualify. 1. Establish a C Corporation This first step is the most important in creating your self directed 401k BORSA account. A C Corporation is the only business structure that this type of account enables, and requires the establishment of shareholders who are taxed separately from your company.

9. Set Up a New BORSA Account In some cases, you may be the only employee of the new corporation, however, if you know you will have employees, you will want to properly offer for them. Realize that federal government law governs your pension plan, not really the condition where your business is usually located. 3. Roll Over Your Existing Pension Plan A series of legal forms must be completed to transfer funds from an existing retirement account to the newly created self-directed 401k BORSA account. When these are total, you can take a drawback from your current accounts and roll it over into our strategy. By rolling over your money, the transaction is not taxable or subject to Irs. gov penalties.

10. 4. Purchase Stock in Your New C Corporation Your new business must offer stock. The sale of stock will provide you with the cash needed to account your organization. 5. Build Your Business With your fund, you can acquire your franchise and begin to build it. As with any investment, this route has risks, which consist of that you could lose your retirement funds if the business fails. However, due to the measured achievement of business operations, this scenario is less likely. Contact the professionals at DRDA for additional information on how you can finance your franchise operation through a self-directed 401k pension program.