Franchise Build-Out Equipment Leasing (Canada)

New franchise locations live or die by timelines and cash flow. Between equipment, millwork, signage, POS, and fit-out, build-outs consume capital long before first revenue. Private-lender leasing can stage vendor payments, bundle “soft” costs (delivery, install, IT), and align monthly payments to the ramp-up curve—so you launch on schedule without starving working capital.

Mehmi Financial Group is both a financing partner and a seller of select commercial assets. We structure franchise projects across Canada with milestone funding, practical covenants, and—when our inventory fits—one-contract packages that include equipment and in-house financing. If you want a side-by-side of structures for your brand, feel free to contact our credit analysts.

What’s in scope for a franchise build-out lease

• Core equipment (by sector). QSR: cookline, refrigeration, dishroom. Retail: fixtures, scanners, labelers. Fitness: cardio/strength. Service: washers/dryers, diagnostic gear.
• Front of house. POS terminals, kiosks, digital menu boards, display cases.
• Back office & IT. Networking, servers/NAS, security, backups, subscriptions (where eligible).
• Millwork & stainless. Counters, tables, prep lines, racking.
• Utilities & install. Electrical/plumbing, rigging, hood/vent components (eligible portions).
• Brand elements. Exterior/interior signage, wayfinding.
• Soft costs. Delivery, configuration, training, software licenses, data migration—commonly rolled into the same facility.

Start ballparking payments with our calculator and review core structures here: Financing & Leasing.

Private lenders vs. banks: when speed and staging matter

Banks can be rate-competitive but slow, document-heavy, and less flexible on refurbished gear or staged payouts. Private lenders price primarily on cash-flow coverage, asset quality, and franchise strength, enabling:

• Progress funding (deposit → delivery → install → acceptance).
• Soft-cost bundling so projects don’t stall mid-build.
• Step-up schedules that start lighter during training and marketing.
• Approvals for newer corporations with strong guarantors and a credible ramp plan.

If you’re tight on liquidity, overlay targeted tools: Refinancing & Sale-Leaseback, Equipment Line of Credit, or—for B2B/wholesale arms—Invoice Factoring.

Lease structures (plain English)

Not sure which fits? We’ll price FMV vs. buyout side-by-side and match payments to your pro-forma.

What private underwriters actually look for (franchise edition)

• Unit economics. A one-page model (transactions/hour × average ticket × margin) with conservative ramp assumptions.
• Franchise strength. FDD/brand kit, proven store performance, training/support, marketing fund.
• Location proof. Signed lease/LOI, demographics, foot traffic, landlord TI details.
• Vendor & warranty. Approved brand SKUs, parts/service coverage, install scope.
• Cash-flow coverage. 6–12 months of bank statements (business or personal if pre-revenue).
• Sponsor profile. Guarantor depth, prior operating experience, liquidity snapshot.
• Risk mitigants. Step-up schedule, modest down or first/last, cross-collateral on paid-off items.

Typical terms, down payments, and covenants

• Term: 24–72 months (84 for larger packages)
• Down / first & last: 0–15% or 1–2 payments in advance—helps B/C/D files
• Payments: Step-up for the first 3–6 months during training and launch
• Security: PPSA on financed assets; personal guarantees for private corps
• Covenants: Insurance, maintenance, consent for additional senior liens
• Refi window: After 12–18 clean payments, revisit rate/term via Refinancing

Multi-site & phased rollouts: keep finance and ops in lockstep

• Pre-approved SKU list. Standardize equipment, POS, networking, and signage for predictable “cost per store per month.”
• Wave plan. Calendar-based sequencing (e.g., 3–5 sites/month) with progress-funding so vendors are paid on deposit/delivery/install/acceptance.
• Change control. Swap model years without re-papering the whole facility; keep acceptance criteria consistent.
• Working-capital overlay. A small revolving line for initial inventory and staffing: Equipment Line of Credit.

Startups, conversions, and transfers

• First-time franchisees. Strong guarantors + brand training + realistic 90-day ramp plan can offset thin financials.
• Conversions/relocations. Sale-leaseback older gear, roll proceeds into new build, and use progress funding to match construction milestones.
• Store transfers. Pair acquisition financing with a refresh bundle; stage payments to minimize downtime.

Broker fast-track: from quote to grand opening

1. Lock the bill of materials. Brand-approved SKUs, signage, install, IT, training, and soft costs—get firm quotes.
2. Pick the structure. FMV for tech refresh; fixed-residual for long-life items; sale-leaseback if cash is tight.
3. Package the file. Application/IDs/void cheque, incorporation/ownership, last filed year + YTD interims, 6–12 months bank statements, site lease/LOI, franchise agreement.
4. Add a simple pro-forma. Sales ramp, labour plan, marketing calendar, conservative breakeven.
5. Milestone funding. Deposit → delivery → install → acceptance certificate; we pay vendors so you don’t float progress bills.
6. Step-up payments. Lighter for 3–6 months while staff train and traffic builds.
7. Month 12–18 review. If performance is strong, reprice to lower your monthly.

Case study: 6-store QSR expansion without cash strain (Ontario)

Situation. Area developer planned six stores in 10 months. Each package (cookline, refrigeration, POS, signage, stainless, install) averaged $265,000. Cash was reserved for hiring and marketing.
Structure. Master approval with progress-funding by wave; 72-month FMV terms, 3-month step-up per site; soft costs bundled (rigging, cabling, training). Small LOC overlay to cover opening inventory.
Outcome. All waves hit calendar; vendor payouts synchronized with milestones; after 14–16 on-time payments per site, we refinanced early stores to trim the blended monthly ~8%, freeing budget for a seventh location.

Common pitfalls (and how to avoid them)

• Under-budgeting soft costs. Cabling, commissioning, training, and signage add up—bundle them upfront.
• Ignoring water/power spec. Mismatches delay inspections and void warranties. Align utilities with franchisor drawings.
• One-size financing. Mix FMV for tech, fixed-residual for stainless/fixtures, and sale-leaseback on paid-off gear.
• No ramp plan. Step-up payments only work if tied to training and marketing milestones.

Approval checklist (credit-analyst view)

• Application, IDs, void cheque
• Corporate docs (registration, ownership)
• Financials: Last filed year, YTD interims, 6–12 months bank statements
• Franchise agreement/FDD + proof of training
• Site lease/LOI and landlord TI details
• Vendor quotes + SOW (install, IT, signage)
• Insurance binder naming lender as loss payee
• 90-day ramp plan (hours, staffing, marketing, conservative sales)

Send what you have—our team stages the rest so underwriting doesn’t stall. For a quick payment preview, try the calculator.

When Mehmi is both seller and financier

Because we both finance and, where inventory fits, sell equipment directly, you avoid multi-party delays. We quote the package, coordinate vendors, and stage payments to acceptance—then revisit pricing once volumes stabilize. If you’ve already chosen equipment, we underwrite the financing and handle milestone payouts to your franchisor-approved suppliers.

Explore options:
Financing & Leasing • Refinancing & Sale-Leaseback • Invoice Factoring • Equipment Line of Credit • Calculator • Contact Us

FAQs

Can I include signage, installation, and IT in the same lease?
Often yes. Private lenders routinely allow soft-cost bundling so projects don’t stall mid-build.

What credit score do I need?
Many lenders like 650+, but stable deposits, strong guarantors, and franchisor support can offset thinner credit.

FMV vs. fixed-residual—how do I choose?
Use FMV for tech you’ll refresh and fixed-residual for long-life fixtures. We’ll price both.

How fast can vendors be paid?
With a complete package, approvals are quick and vendors are paid on delivery/installation/acceptance via milestone funding.

Can payments drop later?
Often. After 12–18 on-time payments, we can explore refinancing to reduce rate or extend term.

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If you want a no-pressure comparison of FMV vs. $10 buyout—or help deciding what to bundle now vs. phase later—feel free to contact our credit analysts. Estimate payments in minutes with our calculator or start a conversation here: Contact Us.