Marco's secures $9 million for franchisee funding 'buckets'

Oct. 19, 2010 | by Jennifer Litz

Adding to its expansive menu of financing options for new franchisees, Marco's Pizza announced today that it has been approved for a new national franchisee lending program created by The Bancorp Bank.

The new lending program marks the fifth alternative financing option that Marco's has announced during the past 18 months to continue bringing new franchise owners into its fast-growing system. In this latest financing program, Bancorp has agreed to provide Marco's franchisees with up to $9 million to finance new franchise locations, to refinance current owners and to finance the acquisition of existing stores. Marco’s Pizza is one of the initial franchisors approved by The Bancorp Bank for its new lending, following brands including BrightStar and FASTSIGNS. 

“With this additional funding as an option, Marco’s will continue our fast-track for growth,” said Ken Switzer, chief financial officer for Marco’s Pizza. “While we have surpassed last year’s records in terms of new stores opened and new stores sold into development, many potential franchisees who want to be affiliated with our brand still face challenges securing capital. Through working with lenders such as The Bancorp Bank, combined with other financing options we have implemented, new franchisees can continue to get the funding they need to join the Marco’s Pizza franchise system.”

CEO Jack Butorac describes the company’s “buckets” from which franchisees get the money to open stores and expand. These self-sustaining resources help vouch for the system’s stability, allowing it to successfully borrow more from banks. Most recently, the company secured $7.5 million from Main Street Bank in San Antonio this past July.

Butorac said the company is also looking at making $10 million of the company’s own money available for further expansion. The CEO has said he wants the company to be the fourth-largest pizza chain, and innovative financing programs are one way to do it. Another way is via Marco’s 35 or so Pizza Area Representatives, franchisees who are responsible for the development of other franchisees’ development in certain geographical regions.

I want the concept to grow quickly – to be the fourth largest pizza chain without it taking 20 years,” Butorac said. “If you do this and structure it right, it can work, and has so far.”  

The system's latest same-store sales figures are up 10 percent, Butorac said, in part because of the value-priced Big Square Deal started in July. The 12-by-14 inch pies are priced from $6.99 to $8.99, and have done especially well in Northwest Ohio and Cleveland, in the company's home state. 


Topics: Business Strategy and Profitability , Financing and capital improvements

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