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Muffin Break Franchise Loan

Tapping into Australia’s coffee obsession

Australians love their coffee and their cafe culture. It’s a small wonder that this industry continues to grow solidly year after year as new operators join the fray.

So if you’re looking to grab a slice of this burgeoning sector and want to leverage an established brand, you may want to consider a Muffin Break franchise.

It’s a franchise model favoured by a number of lenders. With our broker’s help you may be able to borrow up to 100% of the franchise costs.

How to get a Muffin Break franchise loan

Like applying for a loan for your own start-up, the bank wants to see that your situation makes sense.

If you can show that you have some experience along with a business plan and some of your own capital to invest in the business, you’ll have a much better chance of getting approved.

How much can I borrow?

With one of our lenders, you’ll be restricted to buying an existing store only but some of our other lenders may finance a new store if you can provide a solid business plan along with evidence of previous managerial skills in the same line of work.

As a general rule:

  • Existing store: Borrow up to 50-70% of total business costs or up to 100% with an existing residential property as security.
  • Loan term: 10 years (as per the franchise agreement).
  • Loan term with the property as security: 25 to 30 years (standard loan term).
  • Interest only: Around 2 years or more depending if you’re using property as security.
  • Low doc options not available.
  • Discounted interest rates available.

Call us on 1300 889 743 or complete our free assessment form to find out more about a Muffin Break franchise loan and whether you qualify.

Borrow the full amount with a residential property as security

A franchise loan by itself is essentially an unsecured business loan, the type of finance that banks take a conservative approach with, even with the reputation and systems backing a Muffin Break franchise.

However, you can actually use equity in an existing residential property that you own whether it’s your own home or an investment.


You can borrow up to 80% of the property value in your property so, depending on how much equity you have, you can potentially borrow the full costs of securing the Muffin Break site and the set-up fees.

Bear in mind that even with a residential property, you’ll still have to show that you’re contributing some working capital to the franchise to get it up and running.

How do I qualify?

You’ll generally need:

  • Experience: 3-5 years experience working in a manager’s role at a cafe would be preferable but a similar industry is also good. Any references you can provide will add weight to your application.
  • Business plan: With the help of a qualified financial professional you should provide the bank with a plan of how you intend to keep the business afloat including showing profit forecasts and cash flow projections. You should also highlight the amount of capital you can inject into the business in order to keep the business alive.
  • Store financials: If you’re buying an existing store, the bank may ask to see the last 3 years business tax returns and profit and loss statements to ensure that it is currently profitable.

Your own personal financials such as your most recent group certificate and 3 months bank statements may not be required if you have a residential property as security.

The easiest way to find out if you qualify is to let a specialist mortgage broker assess your situation and what your plans are!

How does a Muffin Break franchise work?

The coffee and cafe industry are one of those sectors that appears to be growing stronger every year, due in no small part to Australians love of coffee and cafe culture.

Muffin Break got on the front foot with this obsession around 25 years ago and it’s franchise system has grown significantly over that time.

The setup costs

The total investment in a Muffin Break franchise is around $250,000 to $500,000.

This doesn’t include your $10,000 deposit to secure the site but it does include the $300,000 capital investment costs.

Bear in mind that this cost can vary depending on whether the shop design is inline (four walls and approximately 80-180 sqm) or a kiosk-style cafe (located in a shopping centre and typically 27-30 sqm).

What are the ongoing costs?

  • Royalties: 7% of total monthly sales.
  • Marketing and advertising: 3%.

Why Muffin Break?

Although it’s difficult to provide profit projections without knowing the size and location of the store, what does set Muffin Break apart from other franchise models of its size is the high level of support available to franchisees.

This is something you simply don’t get if you’re starting your own business or buying a non-franchised cafe.

Granted, you’re paying a bit more in upfront and ongoing fees but the marketing, buying power with suppliers, industry knowledge and business expertise you can leverage from Muffin Break is invaluable and will likely see you succeed well past the 12-month failure average of independent businesses.

What will Muffin Break provide me with?

Although the bank will usually want to see that you’ve had experience in managing a similar-sized business, you don’t need to be an expert salesman with barista skills to get approved for a Muffin Break franchise.

You’ll be provided with the following:

  • Initial training program: 3 weeks of training at Foodco’s (parent company) so-called Centre of Retail Excellence in Sydney. The course covers manual handling, food safety, barista training, customer service and more.
  • Formal training: You’ll have the opportunity to undertake nationally-recognised training courses including a Certificate 3 in Hospitality (includes: Food Safety Supervisor Qualification and Accredited Barista Program).
  • Store opening support: A support team of at least 2 BDMs will help you to open your cafe. They will be there to support you in the first seven days of operation.

After your training, you will be provided with continued store support through:

  • Muffin Break’s online learning management system.
  • The opportunity to organise workshops with BDMs.
  • Regional meetings held every 3 months to discuss sales techniques and strategies to capture the market.
  • National, regional and local area marketing
  • Leveraging the franchisor’s loyalty program for customer retention.

How do I sign up?

As is typical with other franchises, the first step is to fill out an expression of interest on the Muffin Break website and ask for franchise kit.

This will provide you a confidentiality agreement (which you’ll need to sign) as well as an example of the franchise agreement you’ll be signing.

Read it carefully and even hire a solicitor to look over the finer details.

If you’re satisfied and think it’s the right franchise for you, complete and return the application form.

You may be required to pay your $10,000 deposit but double check that this is totally refundable should you decide not to proceed.

If you’re successful, this will usually be followed up with a phone interview with one of their business development managers (BDMs) and likely a face-to-face chat. They just want to see that you’re the right fit for their model.

Once you sign the franchise agreement, construction or fit-out work will begin right away.

If you’re buying an existing store, there will typically be a handover process with the current franchisee.

Either way, it’s at this point that you’ll undertake the training provided by Muffin Break.

All up, the time from from the agreement being signed to you opening your store is about 8 weeks.

Muffin Break franchise loan FAQs

What due diligence should I undertake?

When buying an existing store, you should find out the contact details of the current and previous owners.

Muffin Break is actually obligated to provide this information!

Checking financials is one thing but being able to speak with current and previous owners will help you build a picture of the profitability of the store.

You should be asking whether the store is being disadvantaged by a poor location with little foot traffic and high competition.

If not, is it poor management or the requirements of the franchise agreement that hindered growth for past owners?

Based on your skills and experience, you should then be asking whether you can turn things around with a solid business plan. It could be an opportunity in disguise!

What will the franchise kit tell me?

The Uniform Franchise Offering Circular (UFOC) or franchise kit should cover your rights and responsibilities as well as that of the franchisor.

In particular, take note of the recourse rights of Muffin Break in the event of business failure or if you want to end the agreement for any reason.

You should easily find the following information:

  • Litigation.
  • Bankruptcy.
  • Initial franchise cost and ongoing fees.
  • Initial investment.
  • Restrictions on what you can sell.
  • Muffin Break’s obligation.
  • Your obligations as a franchisee.

Tip: Don’t pay any more other than the initial deposit required unless you’re happy with the franchise agreement and you’ve been pre-approved for a Muffin Break franchise loan.

Should I get independent advice?

You should still be undertaking the same kind of due diligence as if you were buying an independent business.

If you’re buying a new store, have an independent solicitor look over franchise terms carefully.

You may even want to hire a franchise business broker who can help you negotiate the terms of the sale.

If you’re buying an existing store, seek the help of an independent financial professional to assess the health of the business and to assist you in drafting up a business plan.

Do you need a Muffin Break franchise loan?

Discover if you qualify for a Muffin Break franchise loan!

Call 1300 889 743 or fill in our free assessment form to speak with one of our commercial loan specialists