Restaurant Finance & Development Conference Recap

November 8th, 2013

Restaurant Finance & Development Conference Recap

Restaurant Finance & Development Conference in Las Vegas

TMC attended the Restaurant Finance & Development Conference in Las Vegas with NADCO. It was an extremely successful event that enabled TMC to make many connections in the restaurant industry.

Cindy Santilena, TMC Financing, A.J. Rashid, Church’s Chicken franchisee, Barbara Morrison of TMC, and George Harrop of CapitalSource, a third party lender.

Check out NADCO‘s blog post about the event here:

Barbara Morrison, Founder and President of TMC Financing, offered innovative approaches to restaurant and franchise finance using the Real Estate Advantage (504) Loan at the Restaurant Finance & Development Conference hosted by Restaurant Finance Monitor and Franchise Times in Las Vegas Nov. 4-6.

The conference, breaking previous attendance records, drew 2100 industry leaders to general sessions and breakouts focused on financing growing restaurant systems. The conference has become a must-attend event for franchisors, major banks and large multi-unit franchisees, as well as a diverse array of financiers.

“It’s like 2007 again,” said one restaurant industry leader, describing the availability of financing for large franchisees and successful systems.

Morrison’s Alternative Financing panel, including George Harrop, Managing Director of CapitalSource and David Sobelman, EVP of Calkain Companies, focused on real estate investment as a franchise growth strategy.

Morrison was joined by a Church’s Chicken franchisee who said he has become successful due to the REAL 504 loan from TMC. His 504 loan for a second location has just been approved.

REAL 504 lending to franchising was up 60% in 2012 over 2011, but most franchisors haven’t adopted real estate ownership as a long-term equity builder to attract individual and multi-unit franchise business owners. The top tier of multi-unit franchisees, however, point to real estate ownership as a pillar of long-term success.

“It’s great equity that brings stability through ups and downs in the economy,” said one Popeyes and Subway multi-unit franchisee who owns the land under 60% of his locations. “Plus, real estate is something you can pass on to your children if they are not interested in running a franchise.” The franchisee recently sold 35 units of stores he owned — stores without real estate ownership.

“I tell my wife, if anything were to happen to me, you can collect a rent check on the property forever,” he said. This particular franchisee has already set up ACH payments to pay rent to his family on his franchise locations.

One successful franchisee and former CEO of an iconic franchise brand said the best bet for lenders is to lend to franchisees who own one or two stores, or those who own at least six. “A lot of franchisees fail trying to get from two units to six,” he said. “They don’t have the business infrastructure to make it work.” Lenders, he said, can be left holding the bag. Then, the franchise leader asked when debt refi would return.