Marco’s Pizza Case Overview
A rapidly growing pizza franchise, Marco’s Pizza, tasked all franchisees with upgrading their POS systems to digitalize placing orders, accept mobile payments, and build a customer loyalty program. The upgrade needed to be completed on a short timeline, which not every restaurant could afford to do with such short notice.
Traditional lenders wouldn’t touch their applications and couldn’t cover the costs with cash flow, so they explored an alternative option – National Business Capital. Our team got in contact, learned about each restaurant’s needs, and went to work, finding a lender that could cover their capital needs on their schedule.
Within two days, the 40% of franchisees who worked with National Business Capital had access to the funds they needed to upgrade their POS systems and meet the franchise requirements, including the ones that didn’t qualify for traditional financing options. After the implementation, customer satisfaction increased by 90%. Marco’s Pizza is now the 7th biggest pizza chain in the nation and has 1,500 locations nationwide.
How National Business Capital Helped Marco’s Pizza
National Business Capital leveraged its exclusive lender relationships to find the right financing for each Marco’s Pizza location. They were able to fulfill their franchise obligations within the short timeline, which accelerated the franchise’s growth as a whole.
It’s not easy for any business to fit the mold of traditional lenders. Restaurants have an especially uphill battle to reach an approval because of the risk and volatility of their industry. This stood as a significant barrier for Marco’s Pizza franchisees.
National Business Capital was created for this very reason. Since 2007, we’ve built relationships with the nation’s top lending institutions to offer an easier process for those seeking access to capital. With one application, each Marco’s Pizza location that applied with us was able to find and compare the loan options they qualify for instead of filling out multiple applications and wasting time.
The speed of our process allowed each franchisee to receive their funds on a short timeline. Traditional lenders can take anywhere from 60 to 90 days, but National Business Capital can get you your funds in hours.
What Financing Options Does a Pizza Franchise Need?
Restaurants can benefit from multiple types of financing, including:
|Type of Financing||Description|
|Term Loans||Term loans are the most basic type of financing. Funds are provided in a one-time, lump sum format and repaid over a set schedule outlined by your lender.
Pizza franchises and other restaurants can use term loans for any business purpose, but they’re best for projects where you know the exact cost. Expansions, renovations, and inventory orders all fall under this category.
|Business Line of Credit||Business lines of credit offer flexible access to capital on an as-needed basis. Borrowers draw from their total credit limit, much like a credit card, and repay the amount on an extended schedule. Interest applies only to the amount drawn, and the borrower can draw the same funds again after they’ve repaid them.
Lines of credit are best for ongoing expenses and projects where you don’t know the exact cost.
|Equipment Financing||Restaurants need equipment, but the cost is often too much for cash flow to support. Equipment financing breaks down the price over an extended schedule and allows businesses to do more with less purchasing power.
Equipment financing often comes with tax benefits. Speak with your tax advisor about this before you purchase equipment outright.
|Revenue-Based Financing||Similar to term loans, revenue-based financing provides a lump sum of capital for any business purpose. However, instead of an interest rate, revenue-based financing comes with something called a factor rate.
The factor rate (usually between 1.1 and 1.6) is multiplied by the funding amount to determine the cost of capital. That cost is deducted from the business’s daily sales through automatic payments.
This type of financing is ideal for restaurants because sales determine your payments. If you have a down week, the payment decreases correspondingly, allowing your business to not worry about meeting weekly/monthly liabilities.