Credit Crunch…
McDonald's Arches
According to some small business owners, ‘Banks only feel comfortable lending to those who do not need the money’, and are continuing to make it even harder for those who do. Restaurant operators are still struggling to obtain financing for expansion, remodeling or upgrading unless they surfaced from the brawl of our most recent economic downturn without a scratch. For instance, McDonald’s Franchisees may find an easier time borrowing capital unlike competitors such as Burger King or Wendy’s, whose last year’s sales weren’t as valuable as those of the “Golden Arches.”
McDonald’s (MCD) Global comp store sales increased 6.5% in October, while stores such as Wendy’s (WEN) decreased almost 2%.
Although the credit crisis is not as bad as it was, and there are signs that access to credit is getting better, lenders are still unwilling to part with their money and loan to just anyone. The capital is available, however, it seems as though creditors are only open to lending to the strongest Franchisees.
As it looks now, if you’re a restaurant or franchisee owner/operator wanting some extra cash for your business, your chances of borrowing are slim unless you’re willing to part with your current business model and trade it in for a seat at Hamburger U.
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