Franchising vs Revenue Based Financing

[nwellborn85]

My brother and I currently run a small HVAC company here in Texas. We've come across some business owners who have started up their own companies but wish they had additional capital to expand their operations. I'm wondering if their is some kind of franchise or other business model out there where we could provide funding to a small business in exchange for a % of revenue. I read something about revenue based financing but wasn't sure if that's the only option or the correct one. I tried looking into different franchising models but can't really find specifics on the different ways to go about it. Anybody know of how that could work? I don't think we would license out our name or anything like that, but possibly provide funding for insurance or to pay for an additional employee (just as an example). Any info would be great.

-Nick

[Owen]

I'm wondering if their is some kind of franchise or other business model out there where we could provide funding to a small business in exchange for a % of revenue.

-Nick

so...you want to invest money in exchange for equity?

[Harold Mansfield]

Franchises generally license out the entire business model, name and provide support for things such as marketing to franchisees. Of course you have to develop all of these things.
Sounds like you want to expand by way of investing into other businesses without actually running them.

Small money like hiring an employee probably won't yield the kind of return that makes it worth while.

Why not try partnerships with other companies or relationships where you hire them as subs allowing you to take on more work and contracts?
If that works out and grows then maybe think about expanding by way of mergers.

Just spit balling some ideas that sound a little more lucrative and worthwhile.

[nwellborn85]

Thanks for the ideas.

[nwellborn85]

Basically. They'd run their own show but I would provide financial support for important things they need that is currently preventing their expansion.

[Harold Mansfield]

Basically. They'd run their own show but I would provide financial support for important things they need that is currently preventing their expansion.

And how do you make money in this scenario?