Financial Advice

by Westpac New Zealand

last updated 14/09/2023

Listing information is supplied by that particular entity. You are advised to confirm the accuracy of the listing and the FANZ membership status of any entity. Neither the sponsors of this Directory nor FANZ nor the publisher accept responsibility for any omissions or errors.

A Guide To Bank Funding For Franchisees

by Westpac New Zealand

last updated 14/09/2023

René Artz of Westpac discusses points to help you secure the necessary funding to get started

Franchising is a powerful business model which can provide would-be business owners with a proven path to success. A good franchise offers advantages such as a recognised brand, buying power, systems and procedures, training, ongoing support and economies of scale which offer significant commercial and competitive advantages.

As a result, this reduces the risk associated with starting a new business from scratch, and increases the likelihood of profitability and long-term success. For these same reasons, a bank will often lend to support purchase of a franchise, making it a popular way into business for many.

One critical aspect of buying a franchise is securing the necessary funding to get started. Some banks, like Westpac, specialise in providing financial assistance tailored to the unique needs of franchisees. These banks understand the franchise business model and can offer underwriting standards, local expertise and guidance that support the financing process.

When evaluating franchise funding applications, banks assess several key factors to determine the viability and potential profitability of the franchise. Understanding these criteria can significantly increase your chances of securing finance approval.

In this article, we’ll examine the factors that banks like Westpac consider when reviewing franchise funding applications. 

René Artz
René Artz, South Island-based
Westpac Commercial Manager -
Franchise, Hospitality,
Tourism & Retail Trade

1 Franchise concept and track record

Banks look at the franchise concept itself, evaluating its uniqueness, market demand and competitive advantage. They also consider the franchise’s track record, analysing its historical financial performance, growth prospects, and any litigation or regulatory issues.  These are the same factors you should be looking at, as part of your due diligence. A strong and reputable franchise concept is more likely to attract bank funding.

2 Franchisee experience and expertise

Banks value franchisees who possess relevant experience. While prior business ownership or management experience is advantageous, it is not always a requirement. In many cases, the franchisor will fully train you to successfully operate in the industry; however, demonstrating a strong understanding of the industry and the specific demands of the franchise can bolster your credibility and increase your chances of securing finance.

3 Business plan and financial projections

Developing a business plan and cashflow is key when seeking franchise bank funding, and it is a good idea to use a franchise-specialist accountant to help you prepare these. Your business plan should outline your market analysis, marketing strategies and operational plans which will underpin the assumptions within your financial projections. It is essential to provide realistic and well-supported financial forecasts. The key is to understand the franchise’s revenue potential alongside expenses at a given level of revenue.

4 Personal financial strength

Banks will also evaluate your personal financial strength, to assess your ability to support the franchise during the initial establishment phase. This includes analysing your credit history, personal assets, existing debts, and liquidity. A strong personal financial position, including a healthy credit score and sufficient collateral, will instil confidence in the bank and improve your chances of finance approval.

5 Franchise agreement and legal considerations

Banks will review the terms and conditions, fees and royalties, and the length and renewal options of the agreement. A favourable franchise agreement that aligns the interests of all parties involved will be viewed positively by the bank.

6 Securing finance approval

To secure franchise finance approval, you will need to meet the  following criteria:

  • Be a New Zealand citizen or permanent resident.
  • Have a good credit history.
  • Typically provide a minimum 50 percent cash or equity toward the franchise purchase; however, this can vary depending on the  brand and industry.
  • Be able to demonstrate that you have the skills, interest and experience necessary to run this franchise business after training.

Once you have demonstrated that you meet the criteria, you will need to submit a franchise finance application. The application will include the following information:

  • Your personal details.
  • Your financial information.
  • The full funding request, including the purchase price/set-up, franchise fee, and any working capital requirement.
  • The details of the franchise you are interested in, including a  business plan and cashflow.

The bank will assess your application and will provide you with a decision, usually within two weeks.

7 Additional advice

Here are some additional tips for securing franchise finance approval:

  • Do your research before you apply for franchise finance.
  • Ask the franchisor for their input and advice. An established franchise will probably have been through this process before, and will be known to the bank.
  • Do consult a franchise-experienced accountant. They will know  what projections and assumptions are reasonable.
  • Make sure that you include all bank-requested information  and documentation.

Remember, banks operate in a highly prudential and regulated environment and don’t like an information void. The more information you can provide to support your application, the better your chances of securing franchise finance approval.

As a leading New Zealand franchise bank, Westpac understands the unique requirements of franchisees and has a team of franchise specialist bankers around the country. Contact them to find out about the financial solutions available to help you into your new business.


The information contained in this article is intended as a guide only and is not intended as an exhaustive list of matters to be considered. Persons entering into franchise agreements should seek their own professional legal, accounting and other advice.

See this advertorial on page 40 of Franchise New Zealand magazine Year 32 Issue 2

Contact details for Westpac New Zealand

For more information and advice on buying a franchise get your FREE copy of Franchise New Zealand magazine.

We welcome links from other websites to this article. Please note that this article is copyright © Franchise NZ Marketing Limited, Franchise New Zealand magazine and Franchise New Zealand On Line. While it may be downloaded for personal use, no part may be reproduced on any other website, in electronic or printed form or in any other form whatsoever.


Listing information is supplied by that particular entity. You are advised to confirm the accuracy of the listing and the FANZ membership status of any entity. Neither the sponsors of this Directory nor FANZ nor the publisher accept responsibility for any omissions or errors.

Order a Print Copy
Order a Print Copy