Franchise Whole Business Securitization


Summary

This practice note summarizes how and why a franchise whole business securitization is accomplished. Securitization financing involves pledging a business's revenue streams (with exceptions) and offering notes backed by those revenue streams in return for borrowed funds (at interest rates usually 200 basis points, or 2%, lower than commercial loan rates) typically obtained from accredited investors such as investment banks, private equity funds, pension funds, insurance companies, and investment funds. This practice note will also identify the participants in a securitization transaction and detail how a securitization typically is structured and accomplished.