As the new year begins, franchisors across the country are setting aggressive growth goals.
New franchise development targets.
New markets.
New operators ready to invest.
But there’s one reality the franchise industry can no longer ignore:
The franchise funding model hasn’t evolved at the same pace as franchising itself.
This isn’t a criticism of legacy systems.
It’s a recognition that the franchisee, the economy, and the funding landscape have fundamentally changed.
And in 2026, those changes matter more than ever.
Over the last decade, franchising has modernized almost every function:
Franchise marketing is digital and data-driven
Development funnels are more sophisticated
Candidate education is stronger
Brands are more protective of integrity and outcomes
Yet franchise financing is still largely built on assumptions from 15–20 years ago.
Assumptions about:
how quickly loans can close
what assets franchisees bring
reliance on retirement funds and home equity
rigid underwriting timelines
As those assumptions break down, friction increases — slowing development and frustrating candidates.
One of the clearest signals of change is the rise of in-house franchise development teams.
This shift isn’t about control — it’s about transparency.
Franchisors are bringing development internal to:
gain visibility into the franchise funding process
eliminate inflated commissions
reduce political funding relationships
align financing guidance with brand integrity
ensure franchisees receive accurate, strategic advice
Funding decisions matter too much to remain a black box.
Traditional franchise funding models were built for a buyer who:
held a long-term W-2 job
had a 401(k) or IRA for ROBS funding
owned a home with usable equity
relied on traditional bank lending
That buyer is becoming the exception.
Today:
Nearly 40% of Americans have no retirement savings
Homeownership among adults under 35 is under 40%
The average first-time homebuyer is now 38 years old
Many homeowners lack meaningful equity due to high purchase prices
This directly impacts SBA loan collateral, ROBS eligibility, and approval timelines.
The candidate pool has changed — but franchise funding structures haven’t.
There’s no question that SBA loans and ROBS funding remain central to franchise ownership.
They offer:
long-term stability
favorable rates
structured capital for proven brands
But the process has become more complex.
SBA loans now often take 60–90 days to close
Documentation requirements have increased
Credit boxes have tightened
Collateral expectations haven’t adjusted to modern borrower realities
Legacy SBA and ROBS providers remain essential — but they are being asked to operate in a system that no longer matches today’s pace.
Alternative franchise financing didn’t rise because SBA stopped working.
It grew because:
development timelines can’t pause for months
candidates lack traditional collateral
working capital gaps are common
franchisors need predictable momentum
not every qualified operator fits a single credit box
Alternative lending has become the flexibility layer modern franchise funding requires.
The mistake has been treating it as a last resort rather than a strategic tool.
Today, franchise funding is often siloed:
Development groups push what they’re compensated on
SBA teams focus on SBA
ROBS providers stay narrow
Alternative lenders offer speed without brand context
No one owns the entire franchise funding strategy.
That fragmentation creates:
stalled deals
confused franchisees
misaligned expectations
slower unit openings
In a competitive franchise landscape, those inefficiencies compound quickly.
The next evolution of franchise financing isn’t about replacing legacy options.
It’s about expanding them.
Modern franchise funding strategies combine:
SBA loans
ROBS funding
alternative lending
bridge financing
working capital
credit-building pathways
multi-stage funding plans
All aligned under one transparent, brand-aligned approach.
This benefits:
franchisees (more options, less friction)
franchisors (visibility and consistency)
legacy funding partners (relevance and retention)
development teams (faster conversions)
The franchise brands that scale fastest this year won’t just have strong marketing or operations.
They’ll have a modern franchise funding experience:
transparent
flexible
strategic
built for today’s entrepreneur
This isn’t disruption for disruption’s sake.
It’s modernization — long overdue.
As this new year begins, franchisors should ask a simple question:
Is our franchise funding model built for yesterday’s buyer — or today’s?
The answer will define the next decade of franchise growth.