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Forza Coffee Co. understands the difficulty for first-time business owners to get financing from traditional sources.  To help these new entrepreneurs and to achieve its franchise growth, it has put up an in-house financing arm.  BusinessExaminer.com says Forza is putting their money where their mouths are.  Rich Jennings, CEO and managing partner of Forza, says “We require a more hefty investment on their behalf, but we are giving them the opportunity to own their first business.”

Another requirement for those who want to access this loan is site selection.  Jennings explains, “The risk factor is: What happens if this particular person or group falls apart, whether it financially falls apart or (the) business partnership falls apart?”  Jennings said. “Our franchise relationship gives us the opportunity to step in and buy out the business from them.  We pick the right sites that we would feel comfortable operating ourselves.”

The owners of Forza Coffee Co., for example, decided that rather than simply working with potential franchisees to secure a traditional bank loan, they would put their money where their mouths are.

Last month the company announced that franchisees could access in-house financing options from the local coffee shop company.

Part of the change taking place involves a new financial funding arm that helps would-be franchisees interested in owning a coffee shop. The company anticipates it will lend nearly $3 million to first-time business owners — or those looking to expand their investment portfolio.

“The problem was, as we went down the path with these banks, the chief credit officers that hold the strings of assessing risk would basically shut down any opportunity for first-time business owners to jump into the game,” said Rich Jennings, CEO and managing partner of Forza.  “We require a more hefty investment on their behalf, but we are giving them the opportunity to own their first business.”

And the concept appears to be working. Forza has finalized its first three loans.
The company’s goal is to open at least 20 new locations and have at least a third of them in different states. Or, as Jennings put it, the “2012 goal is to branch out and bring Forza across the country.”

Christine and Tom Forrey are planning to open two Forza shops in Thurston County during 2012, one more in 2013 and eventually would like to have between four and seven sites during the next three to five years.

“We’ve never owned a business, so a bank would not look at us for a loan — even though I have lots of business experience and training,” she said.
To help ensure the company expands into the “right” locations, the ownership group decided that access to the in-house financing option would require that they had input about site selection.

Jennings said. “Our franchise relationship gives us the opportunity to step in and buy out the business from them. (We pick) the right sites that we would feel comfortable operating ourselves.” …

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