Smart Business Magazine, Mar 2013

The financing really dried up he says Treliving started as a franchisee with Canada based Boston Pizza in British Columbia in 1968 and eventually bought out the entire Bostons restaurant chain in 1983 This has really affected just about everybody in most small business market sectors Small business growth in the United States has really been negatively impacted by the inability to find sources of financing Nowhere has that trend been felt more acutely than in the restaurant chain business It has taken a toll on us especially when it comes to trying to attract new 18 Smart Business Dallas March 2013 The quality of franchisees youre getting is what you should be looking at now the strength of the person going in JIM TRELIVING CHAIRMAN AND CEO BOSTONS RESTAURANT SPORTS BAR franchisees into the business Treliving says New franchisees generally need to have a down payment of 20 to 35 percent of the cash available to go into business Nowadays even potential franchisees who do have that amount on hand are having trouble getting banks and other financial institutions to do any kind of work with them in the sense of taking a chance on them Todays persistently low interest rates make it hard on those who want to start businesses because finance companies are less inclined to take chances on small businesses when their potential returns are so low Most of the banks weve talked to in the U S even though theyre in a situation where their balance sheets are OK theyre not lending money for small businesses Treliving says And its not just the banks its all types of financial institutions Obviously any type of lender is going to require a return on its money and if youre buying the money at a bank at 2 percent and youre lending it out at 3 or 4 or even 5 percent youre not going to make a lot of money on it Thats why theyre not taking many chances on people who want to start small businesses Its funny these days a lot of people in this business are saying The good thing is weve got these low interest rates and the bad thing is weve got these low interest rates Its really a tough problem Give partners slack The financing problems that Bostons and other small and midsized restaurant companies have been facing isnt limited to just attracting new franchisees Its also affecting the ability of the companys existing franchisees that want to expand their businesses by opening new restaurants within their territories A lot of our franchisees bought territorial pieces Treliving says We entered into agreements with them back when we sold them their first store that they would open a certain number of additional restaurants in their territory over a certain period of years We mutually agreed and an important part of that agreement was that we had to make sure that theyre on solid financial footing before moving to the next level COVER BOSTONS RESTAURANT SPORTS BAR