Equipment Financing for Multi-Location & Franchise Expansion Without Giving Up Equity
How can I finance equipment for my wellness studios without giving up equity? You leverage the physical assets themselves to secure capital.
By using equipment loans, leasing, or sale-leasebacks, operators can outfit new locations with high-end Pilates reformers or cardio machines without diluting their ownership. The equipment acts as collateral, meaning you preserve your cash reserves and keep full control of your company.
You built your brand, and you should not have to sell a piece of it just to open your next unit.
How much does a second location really cost to outfit?
Expanding from one location to two is the hardest jump an operator will make. You are no longer just running a business; you are building an infrastructure that can survive without you standing at the register.
Before you sign a lease, you have to look at the hard numbers. A $500,000 buildout carries roughly $20,000 to $25,000 per month in payments before the doors even open.
Many operators rely on a tenant improvement (TI) allowance—funds provided by a landlord to build out a commercial space. But landlords rarely cut that check on day one.
You often have to float the construction costs for months, waiting for inspections and final approvals before the TI reimbursement hits your bank account.
Then there is the reality of your profitability. Operators often confuse their gross margin with their four-wall EBITDA, which is the actual profitability of a single location before corporate overhead is factored in.
A 70% gross margin on a coffee cup does not mean you have the cash flow to support a second lease, a new general manager, and a $150,000 commercial kitchen package [3].
If you are opening a third unit, you need a regional manager, standardized training, and a bulletproof supply chain. Growth breaks weak systems.
What equipment financing options work best for multi-location franchise groups?
What equipment financing options work best for multi-location franchise groups? The best options are revenue-based capital, equipment leasing, and private alternative capital, because they move fast enough to meet strict franchisor timelines.
Traditional bank loans are cheaper, but they often take weeks to close, which can stall a multi-unit rollout.
Franchise operators frequently use Master Financing Agreements to fund several locations at once. They also use sale-leasebacks on existing franchise kitchen equipment to fund new territory build-outs.
According to the Equipment Leasing and Finance Association (ELFA), over 83% of businesses in the United States use some form of financing to acquire equipment [3].
Here is how the primary funding vehicles compare for multi-unit operators:
Financing Type | Approval Speed | Best Use Case | Key Characteristics |
|---|---|---|---|
SBA Loans (7a & 504) | Weeks to months | Heavy machinery, real estate, or full buildouts | Up to $5 million for 7(a) [1] and $5.5 million for 504 [2]; requires extensive documentation. |
Private Alternative Capital | 24 to 48 hours [3] | Fast franchise brand mandates or property improvements [4] | Rapid funding for operators who cannot wait on traditional bank timelines. |
Equipment Leasing | Days | Point-of-sale software, digital displays, tech upgrades | Lower monthly payments; you return or upgrade the asset at the end of the term [3]. |
Homegrown Revenue-Based Capital | Days | Multi-unit expansion, renovations, new location buildouts | Non-dilutive capital that scales with revenue; 3 to 5 year flexibility; no personal guarantees. |
Should I lease or buy my commercial equipment?
Deciding whether to lease or buy comes down to the lifespan of the asset. You want to match the financing term to how long the equipment will actually generate revenue for your locations.
Lease technology that ages quickly: Point-of-sale systems, digital menu boards, and computers become obsolete in a few years. Leasing allows you to upgrade this tech at the end of the term without being stuck with outdated hardware [3].
Buy heavy-duty machinery: Commercial ovens, walk-in coolers, and heavy manufacturing equipment have a useful life of ten years or more [2]. Purchasing these assets outright builds long-term value on your balance sheet.
Use sale-leasebacks for trapped cash: If you already own your fitness gear or kitchen equipment free and clear, you can sell it to a funding partner and lease it back [3]. This frees up immediate cash for your next location without disrupting your daily operations.
How does Homegrown fit into multi-unit expansion?
Homegrown provides flexible, non-dilutive growth capital for brick-and-mortar operators who already run at least two locations and want to open more. Non-dilutive means we do not take an ownership stake in your company.
You get the capital you need to scale, and you keep total control of the business you built.
Our model is built for the realities of physical expansion. We do not require personal guarantees, and we do not force you into rigid, fixed daily payments.
Instead, we offer revenue-based repayment with 3 to 5 year flexibility, meaning the capital moves with the natural ups and downs of your business.
We fund operators across restaurants, coffee shops, fitness studios, childcare centers, beauty businesses, and hospitality concepts. When Switchyards needed to expand their neighborhood work clubs, or when Seemingly Overzealous Ice Cream prepared for their next phase of growth, they needed capital that understood brick-and-mortar timelines.
We decline most of the deals we see because we will not fund growth that breaks a business. But if you have a strong four-wall EBITDA and a clear path to your next unit, we can help you get there.
Frequently Asked Questions
How can I finance equipment for my wellness studios without giving up equity?
You can finance wellness and fitness equipment through equipment loans, leasing, or revenue-based capital. Because the Pilates reformers or cardio machines act as collateral, the funding partner does not need to take equity in your business.
This allows you to outfit a new studio while preserving your ownership and your cash reserves.
What equipment financing options work best for multi-location franchise groups?
The best options for multi-location franchise groups are revenue-based capital, equipment leasing, and private alternative capital. These vehicles move fast—often funding in 24 to 48 hours [3]—which is critical when meeting strict franchisor deadlines for brand mandates or property improvements [4].
SBA loans are also an option for heavy, long-term assets, though they take much longer to process [1][2].
Conclusion
Expanding a brick-and-mortar brand requires serious capital, with the average new franchise location demanding around $150,000 just for equipment [3]. But you do not have to sell equity to fund that growth.
By understanding your true four-wall EBITDA, planning for tenant improvement delays, and choosing the right funding vehicle, you can scale on your own terms. As always, discuss these capital structures with your accountant or advisor to ensure they align with your long-term goals.
Whether you lease your point-of-sale software or use revenue-based capital to buy heavy-duty kitchen gear, the goal remains the same: protect your ownership while building your next great location.