Gloria Jean’s Franchise Loan
If you have a passion for coffee and you’re looking for a challenge, a Gloria Jean’s franchise loan may be just what you need to quit your day job and start earning a great income.
Gloria Jean’s is one of a number of acceptable franchises that banks will lend for, however, you can’t just count on its popular brand to get the money you need to buy a franchise.
You still need experience and be able to show a solid business plan to give you a strong chance of getting approved for a Gloria Jean’s franchise loan.
Gloria Jean’s franchise loan approval criteria
Do you have previous experience in the cafe industry? What about a residential property to put towards the purchase?
You’ll have to answer these questions and more but you can make the process a lot easier with the help of a mortgage broker that specialises in Gloria Jean’s franchise loans.
How much can I borrow?
- New or existing store: Borrow up to 60%-70% of the business value or up to 100% with equity in a residential property you own.
- Loan term: In line with the lease or up to 30 years with a property as security.
- Low doc options not available.
- Interest only: 1 year or up to 3 years depending on how much you’re borrowing.
- Business plan: It should detail your cash flow and revenue forecasts for the next 5 years at least.
- You’ll need to have at least 3 years experience in a similar industry.
- Our mortgage brokers may be able to negotiate reduced commercial interest rates.
Just like borrowing to buy a standard property, the amount you can borrow and the loan terms available to you depend on the strength of your application.
Call us on 1300 889 743 or complete our free assessment form to discover how much you can borrow.
Why speak to a mortgage broker?
The mortgage brokers at Home Loan Experts understand complex credit scenarios including getting approved for franchise finance.
A number of our senior brokers have commercial credit experience with a number of years in the credit departments of a number of major banks and lenders.
In addition to this, we have almost 40 lenders to choose from and we know the key decision makers.
What does this mean for you?
Because we know exactly what banks are looking for in a Gloria Jean’s franchise loan application, we can highlight the strengths of your situation and mitigate any concerns we know the bank may have by providing strong evidence and reasoning.
With the lender relationships we have in place, we can not only get you approved but we are even in a position to negotiate higher borrowing limits (LVR) and reduced interest rates.
What does the lender want to see?
Franchise loans are typically seen as a higher risk than buying a standard commercial property like a retail shop or an office building.
The trick to getting approved is providing strong evidence of your financial situation and your character as a business owner.
If you’re currently working, you should provide:
- Your last two payslips.
- Your latest group certificate.
- Your last 3 months savings in a bank account.
- A residential property with adequate equity.
Do you need help with refinancing your residential property to cash out equity?
Our mortgage brokers can help you do just that!
Depending on how much equity you have to put towards the purchase, you may be able to borrow up to 100% of the business value.
Complete our free assessment form to discover how much you can borrow for a Gloria Jean’s franchise loan.
Why do I need experience?
Banks can’t simply lend on the value of the Gloria Jean’s brand alone!
Even though you’re starting your own independent coffee shop, you’re still going to be running a business and all of the costs and management requirements that come with it.
It’s for this reason that banks usually ask that applicants have at least 3 years experience working in a similar industry, like hospitality, and in a similar-sized operation.
A senior supervisory or managerial role is preferable.
The more evidence you can provide, the better!
Ask your old boss and staff members for a reference. You may even want to ask your previous employers for their last 2-3 years business activity statements (BAS) and profit and loss (P L) statements that shows revenue increasing year on year.
The bottom line is that bank wants to see that you’ve had success in running a business in the past.
Experience plus a detailed business plan of how you plan to run the franchise over the next five years is at the heart of any good Gloria Jean’s franchise loan application.
Why buy a Gloria Jean’s franchise?
With more than 380 franchises operating across Australia, Gloria Jean’s is actually part of Retail Food Group (RFG), a holding company that also owns other well-known brands such as Donut King and Michel’s Patisserie.
Apart from leveraging its resources and network of business development managers across more than 2,400 outlets, you can also take advantage of RFG’s work as a wholesale coffee roaster.
What this means for your Gloria Jean’s franchise is access to much cheaper supply channels than if you were to open your own coffee shop.
How much does the franchise cost?
As per the Gloria Jean’s franchise kit, the costs of opening and buying into the franchise model depend largely on location and the size of the store.
As a general rule though:
- Franchise cost: $350,000-$450,000 or more if the store has a drive thru.
- Franchise fee: $32,500.
- Royalty fee: 6% of gross weekly sales.
- Marketing and advertising fund: 2% gross weekly sales.
You need to provide your own start-up working capital costs, rent, bank guarantee, advisor’s fees, insurance and on-going operational costs.
Ask for a franchise kit
It’s crucial that you ask Gloria Jean’s for an information pack before signing the franchise agreement.
Getting independent financial and legal advice is also essential.
Do your due diligence
It’s important to understand that you’re not buying a share in the Gloria Jean’s business.
Like buying an other type of commercial property, you need to question the reasons why the current franchisees are selling the business.
It may be that they’re retiring, their financial situation may have changed due to illness or death in the family or perhaps that had always planned to sell the business for a profit as per their exit strategy.
Ask for the financials of the business including business bank statements and P L for the past 3 years. Go over them carefully with your accountant.
It may be that in you’re in a position to negotiate on the price of the business but don’t be afraid to walk away from the deal completely if the numbers don’t add up.
If they tell you the business isn’t what it was cracked up to be, this should be red flag to you to investigate whether the location is not hitting the right demographics, there is increased competition in the area or if there are other market forces going on.
The vendors and Gloria Jean’s themselves may not be willing to be open about these factors but it’s in your best interests to ask tough questions.
Even if it’s a new store, question the site that Gloria Jean’s have chosen.
If you’ve done your market analysis as part of your business plan, you’ll be able to quickly identify whether the location matches your target market.
Expected revenue from the franchise
Putting a dollar figure on the revenue you stand to make depends on your store location and how well you can manage the business.
In saying that, Australians have a love affair with coffee and the latest IBISWorld reports forecasts revenue to reach in excess of $5 billion.
However, with a growing number of specialty cafes and coffee shops and low barriers to entry into the industry, competition is fierce.
The way in which you can innovate and really target and build rapport with your target market will determine your success in running a Gloria Jean’s franchise.
How will Gloria Jean's support me?
The beauty of buying a franchise is that support you get access to can help you avoid many common mistakes that first-time business owners make.
To get you started, Gloria Jean’s provides the following:
- You’ll undergo RFG’s training academy.
- You’ll attend Gloria Jean’s ‘Coffee University’ where you’ll undertake barista and store management training. The course runs for about 5 weeks with 2 weeks spent in their Sydney training centre and 3 weeks in coffee stores in your own state.
- Gloria Jean’s handle site selection, store construction and instore design as well as point of sale (POS) materials.
- Access to their vast marketing and advertising network from a national perspective but also to drive customers locally.
- A support network of business development managers and store operations managers.
Should I run the business as a partnership?
Partnerships can be a risk for not only you and your business but franchisors are generally wary of them as well.
Speak to a solicitor about putting a partnership agreement in place that sets out the rights, duties and obligations of each partner.
It may be that you provide the majority of the investment capital but don’t invest much in the way of daily operations.
Other questions to ask include:
- How will profits be shared?
- What if there are disputes over important business decisions?
- What if one of the partners wants to leave the arrangement or unfortunately passes away?
Do you need a Gloria Jean’s franchise loan?
Call us today!
Speak to the Gloria Jean’s franchise loan specialists!
Let one of our mortgage brokers properly assess your situation and business plan and put you in touch with a lender that can help you finance your dream coffee store.
Call us on 1300 889 743 or complete our free assessment form today!