In this episode, Erik is joined by Sherri Sieber, president of FranFund, to dive deep into the pitfalls and must-knows for emerging franchisors—and the critical importance of funding, accurate FDDs, and realistic projections.

 

🔑 Key Takeaways:

🚩 Red flags when franchisees are only allowed to call 3 out of 20 franchisees.

💰 Why underfunded franchisees are a risk to your brand's survival.

📊 The importance of Item 7 in the FDD—and how lowballing can backfire.

🧠 What lenders really look at when evaluating a franchise brand.

🧾 Item 20 explained: why losing franchise units hurts more than you think.

🏛️ The return of the SBA Franchise Directory (and why it matters).

📉 The Coleman Report: the "credit report" for franchise loan history.

🏗️ Real estate delays and overspending on flagship locations = long-term pain.

🙅‍♂️ Why saying "no" to an unqualified candidate is a gift, not a failure.

📣 Resources Mentioned:

 

✅ Join the free Franchise Secrets Facebook Group → https://FranchiseSecrets.com/facebook

✅ Learn about the Franchisor Mastermind → https://ScalableFranchise.com

 

⏱️ Timestamps:

00:00 – Red flag: Only allowing 3 franchisee references

02:00 – The danger of poorly capitalized emerging brands

06:00 – Underqualified buyers & the franchise fee trap

10:00 – Visualizing burn rate and the path to break even

13:00 – Why an inaccurate Item 7 can ruin lender trust

20:00 – The power of Item 20 and why lost units matter

23:30 – The Coleman Report: Franchise credit score explained

28:00 – SBA lending changes coming June 1st

37:00 – Costly buildout mistakes by franchisees

45:00 – Real estate scarcity cripples scaling

50:00 – When FranFund says "no," it's for your brand's good

 

💬 Final Thoughts:

If you're an emerging franchisor—or thinking about becoming one—this episode is a must-listen. Your first 10–20 franchisees define your brand's story, reputation, and lender viability. Don't build a brand on hype. Build it on solid systems, funding, and trust.

 

👍 Like, Subscribe & Share if you found value.

🎧 Follow the Franchise Secrets Podcast for more expert conversations!

 

Connect with Sherri and FranFund here:

Website: https://www.franfund.com/

Linkedin: https://www.linkedin.com/in/sherriseiber/

 

Connect with Erik Van Horn:

🌐 Website - https://franchisesecrets.com/   

📷 Instagram - https://www.instagram.com/erikvanhorn/  

👍 Facebook - https://www.facebook.com/erik.v.horn/  

💼 LinkedIn - https://www.linkedin.com/in/evanhorn/ 

 

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