Every Dunkin’ Donuts franchise owner is unique—indeed, every shop is—and as such, each has different financing needs. With a dozen financing Sponsors currently on board and more in the pipeline, DDIFO is delivering connections to a variety of lenders that offer particular specialties to meet the diverse and distinct funding demands of its members. Whether you need limited, short-term funding or long-term, large project support, there is a DDIFO Sponsor who can help. Here are just a few examples.
Based in Central Massachusetts, Fidelity Bank is one of the oldest, strongest and continually growing independent community banks in the region. Fidelity Bank offers the experience of a big bank with the personal service of a community lender. As a franchise owner client, you deal directly with the decision makers who are committed to responding quickly and knowledgably from day one of your relationship.
Fidelity Bank offers mid-to-large scale financing to franchisees throughout New England and New York State. The lender provides network financing for new stores, store acquisitions, expansions, remodels and related real estate. Fidelity Bank tends to work with franchise owners or owner networks with at least four or five shops. Its minimum transaction amount is $500,000 and the maximum is $10 million. The bank is a “relationship lender,” meaning its aim is to finance the relationship and be the primary lender for an operation, not just to fund a single transaction. Fidelity Bank can fit the bill no matter the size of the network, serving all of the needs of a network with a handful of stores or helping franchise owners with more than 100 stores to diversify their banking relationships.
While Fidelity Bank just initiated its Dunkin’ Donuts Commercial Lending Program six months ago, President and Chief Lending Officer John Merrill and Senior Business Banking Officer Sally Buffum each have more than 10 years experience providing financing to Dunkin’ franchise owners.
“We may be small, but we’re experienced. We understand the capital needs of a growing or existing network of Dunkin’ Donuts stores, but also recognize that each network is different and we’re nimble in our customization of services for individual franchise owners,” said Merrill. “We’re putting a lot of effort into growing our lending program, and we’ve had a number of early successes.”
Through Fidelity Bank’s LifeDesign approach, your relationship would typically begin with a conversation with one of the bank’s commercial lending Relationship Managers to discuss what you’re trying to accomplish and what your capital needs are. Your Relationship Manager would require financial statements and other documentation to fully grasp how your needs and goals fit into your overall business plan. When it comes to the application and decision-making process, everything is tailored to the transaction type and complexity as well as the franchisee’s needs. Fidelity Bank would ask for a project timetable upfront and design a plan to meet that timetable. This would be part of the complete financial package and transaction outline ultimately provided by the lender. Throughout the process, your Relationship Manager is there to walk you and your associates (e.g., your accountant) through the steps and/or to answer any questions.
Headquartered in Portsmouth, New Hampshire, Direct Capital is a national direct lender that has worked with Dunkin’ Donuts and Baskin-Robbins franchise owners for more than a decade. In fact, the lender has a team of Franchise Finance Managers specifically trained to work with the Dunkin’ Donuts community. Offering small-to-mid scale financing for new store development, equipment and technology replacement and upgrades, remodels, store acquisitions and even relocations; Direct Capital’s typical minimum transaction amount is $2,500 and the maximum is $1 million.
In addition to traditional finance structures, working capital loans are available. Direct Capital has a brand new program exclusively for Dunkin’ Donuts and Baskin-Robbins franchise owners: All are automatically pre-approved for $25,000 of working capital financing per location and may be eligible for higher amounts. These short-term, unsecured loans can be used to boost liquidity and cover general business expenses such as inventory, labor, advertising and taxes.
Express underwriting and approval services streamline financing for Dunkin’ Donuts clients. A one-page application is all that is required for loans under $100,000, and approvals and documentation are processed the day of the application. For larger loans, the process is initiated with that same application, but additional financial review is required. Once financials are received, Direct Capital typically makes decisions within two business days on remodels, new stores, acquisitions and relocations in two business days. What’s more, the lender’s ClickFund™ electronic documentation system allows you to review and sign financial documents through a secure website, significantly reducing the turn-around time of “hard copy” processing. For multi-unit franchise owners, Direct Capital designed a Master Finance Agreement to simplify applications for subsequent financing with the completion of a one-page addendum to simplify the process of securing additional funds over time. Direct Capital also can consolidate all of your invoicing and offers flexible payment options (deferred and seasonal).
“We have grown so comfortable with the Brand and are so confident in the ability of franchise owners to perform that, even in a generally tight lending climate, we’ve had a wider credit window for franchisees in the Dunkin’ system,” said Robyn Gault, Vice President of Strategic Accounts. “In 2012, we are looking to expand our programs and allocate even more funding to the Dunkin’ Donuts community because it has been so successful.”
GE Capital, Franchise Finance (GE Capital) has more than 30 years experience serving mid-market owner/operators with multiple stores in the restaurant and hospitality industries. In January of 2010, GE Capital reorganized to a regional model and put a major focus on Dunkin’ Donuts becoming a core brand. While headquartered in Scottsdale, Arizona, GE Capital is dedicated to lending to franchisees across the country with originations teams embedded in the East, Central and West regions.
“We have the expertise in the restaurant space to understand key issues for franchise owners, and our regional focuses give us a better grasp of each client’s local marketplace,” said Brian Frank, Managing Director, East Region. “And because GE has the knowledge and expertise in a variety of industries, we not only provide the capital but also the insight on topics such as market competition, energy costs, local and global economies, health care and government. Our experts can tap into these and other areas to help a franchise owner grow their business.”
GE Capital stands true to its tagline, “We’re not just bankers. We’re builders.” The lender is committed to helping you do more than maintain your business; it aims to facilitate your growth vision. GE Capital offers term loans, refinancing, real estate mortgages, sales leaseback, acquisition financing and development lines for new stores and remodels. It predominantly does financing across the board for an entire business, working with seasoned owner/operators with at least three to five years experience and six to 10 stores. Decisions are made on a case-by-case basis, however, so the lender is always open to speaking with franchisees who might not fit this exact profile.
GE Capital has more than 300 employees nationwide who are solely dedicated to the restaurant finance business, so it can truly provide a national perspective. The lender also has a Brand Manager, Christine Keating, who works with Dunkin’ Brands directly to ensure GE Capital understands all of the brand’s issues and expectations, and to forge a triangle partnership since it works best when the franchisee, franchisor and lender are all working together to grow the business.
While GE Capital clearly has expansive operations, it remains committed to serving each franchise owner client as an individual. You typically begin by talking with an account executive in your region to establish the groundwork. The regional account executive gathers basic information about your business such as history and performance, scope of anticipated projects, overall business plan, financial history and documentation. The account executive then brings in an underwriter and closer to form a “Deal Team” specifically dedicated to you. This team subsequently walks you through the transactions step-by-step.
For 25 years, Joyal Capital Management, LLC (JCM) and its affiliates have provided financial services to Dunkin’ Donuts franchisees. This longstanding association began with estate, business and financial planning and evolved into lending-related services. Today, JCM offers exclusive financing arrangements to Dunkin’ Donuts franchisees along with outstanding personalized service, including a dedicated team that handles transactions in a 100% turnkey process requiring minimal franchisee involvement.
Based in Plymouth, Massachusetts, JCM primarily serves franchise owners on the East Coast, supplying traditional franchise financing for new store development, acquisitions, expansions, remodels, refinancing, and so on. What makes JCM unique, however, are the funding and debt structuring services available only to Dunkin’ Donuts clients. If you need immediate access to capital, JCM can help. The firm has very substantial secured funds set aside to provide the capital now and subsequently structure that debt, meaning you can get the money you need today, literally.
JCM also offers exceptional debt restructuring. When you have loans with more than one bank, often the banks and loan covenants make it impossible to access additional capital. In this situation, JCM will work with you to restructure your loans, getting rid of the other banks and terming out your existing debt in ways that meet your ongoing cash flow needs.
“We are proud to offer services to our Dunkin’ Donuts clients that go ‘above and beyond.’ It’s our mission to be there as a resource they can rely on to help grow their business,” said JCM Chairman and CEO Gary Joyal. “We currently serve the full spectrum—from franchisees who own just one shop to the largest franchisee in the system—and we believe in developing long-term relationships, not transactional-based relationships.”
In fact, JCM stood by its Dunkin’ Donuts clients through a serious crisis. In 2007, while managing the Dunkin’ Donuts Lending Program created by Sovereign Bank in the early 1990s, JCM began getting panicked calls from franchisees: Sovereign was calling in loans that were technically in default solely due to not meeting growth criteria stipulated in the loan agreements. Gary Joyal immediately contacted Northern Bank & Trust Company (a small, privately owned community bank) to explore solutions. Joyal wanted: simple loan approval, no financial covenants and no overly burdensome cross-collateralization provisions—a key component that would allow larger franchisee networks to grow and prosper. Northern Bank President and CEO James Mawn agreed and further said the only criteria would be that franchisees make their monthly payments. In addition, Mawn would meet clients face-to-face and share his home phone number for use in case of an emergency. JCM established a partnership with Northern Bank in 2008 and began transferring business from Sovereign. The program has been extremely successful and, whenever a franchisee has faced an urgent problem, Mawn has come through with a resolution.