Need Re-Imaging $$S? Try Deferred Compensation: By Foregoing Bank Loans, Franchisors can Use Rollover Financing to Push Their Brands (Finance‪)‬

In today's economic environment, projects like re-imaging are a double-edged sword. Many franchisors, as well as franchisees, could benefit from the consumer confidence and consumer interest generated by an updated look or a brand that's been re-energized. Franchisors benefit from presenting a more attractive, compelling image to new franchisee prospects. Existing franchisees can benefit from increased revenues and the "stir" created on a local level, raising interest in the community and generating a positive public-relations story for local consumers. But all too often, re-imaging becomes an issue of funding, rather than benefits. Franchisees may feel that they just can't raise the capital to implement the changes necessary for a brand face-lift, or they may feel that their current revenue streams are sufficient, and re-packaging of their image is an unnecessary expense. As franchisors consider re-imaging campaigns, financing becomes one of the most salient issues driving project decisions. Will banks provide loans to franchisees for image upgrades such as signs, product brochures and facility upgrades? What if the franchisees are new in business or have suffered revenue declines in recent years? Do projections for future income support payments required for capital loans? Will franchisees be willing to take out additional loans to support branding efforts?