# Franchise financing in Canada

How franchisees pay for the franchise fee, the build-out and the first months — bank franchise programs, the CSBFP, equipment financing — and what lenders want to see.

Published: 2026-09-26 · Spark

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Buying a franchise is starting a business with a playbook. Lenders like playbooks: a known brand, a proven model, sales figures from other locations. That makes franchises easier to finance than most new businesses — though you still need to bring money of your own.

## What needs paying for

A new franchise usually has four kinds of cost:

- **The franchise fee** — for the right to use the brand and system
- **Leasehold improvements** — building out the space to the franchisor's standards
- **Equipment** — kitchen, fixtures, signage, technology
- **Working capital** — rent, staff and stock until the location pays for itself

The franchisor's disclosure document should set out the expected total. In the seven provinces with franchise disclosure laws — Ontario, Alberta, British Columbia, Manitoba, Saskatchewan (since June 30, 2026), New Brunswick and Prince Edward Island — franchisors must give you one before you sign. Read the costs section closely, and have a franchise lawyer read the rest.

## Where the money comes from

**Your own money.** Lenders expect the franchisee to put in a meaningful share of the total, and many franchisors set a minimum of their own. Ask both what they expect before you plan around a number.

**Bank franchise programs.** Canada's big banks have franchise lending teams, and many established franchise brands have arrangements with them. Ask the franchisor which lenders already finance its franchisees — it can make the process much faster.

**The Canada Small Business Financing Program.** Since 2022, the [CSBFP](/guides/canada-small-business-financing-program) can finance **franchise fees** and other intangible assets, along with equipment, leasehold improvements and working capital. Intangible assets and working capital together are capped at $150,000, within the program's overall limits. For many franchisees it covers most of the build-out through one bank.

**BDC and Futurpreneur.** BDC lends to franchisees. [Futurpreneur](/guides/startup-business-loans) lends to owners aged 18 to 39 starting or buying a business, and a franchise can qualify.

**Franchisor financing.** Some franchisors finance part of the fee or the equipment themselves, or defer the fee. Ask.

**Equipment financing.** [Equipment financing](/capital/equipment-financing) or a lease can cover the kitchen or fixtures separately, secured by the equipment itself. See [lease or loan](/guides/equipment-lease-or-loan) for the difference.

## What lenders look at

- **The brand.** How long it has been franchising in Canada, how many locations, how many have closed.
- **You.** Industry or management experience, personal credit and net worth.
- **Your own money in.** And where it came from.
- **The location.** The lease terms, the site, the local market.
- **The numbers.** A projection for this location, ideally grounded in the franchisor's figures for similar ones.

## Buying an existing franchise location

Buying a location that is already trading is different: there are real sales and bank statements to read. That makes it closer to [buying any business](/guides/buying-a-business), with the franchisor's approval of you as the new owner added to the list.

## Once the location is trading

After the first months, the financing needs change. A [line of credit](/capital/line-of-credit) for uneven months, equipment financing for upgrades and replacements, or a [term loan](/capital/term-loans) for a refit or a second location — all read from the location's own statements rather than projections. [How to get a business loan in Canada](/guides/how-to-get-a-business-loan-in-canada) covers the steps.