When Rick Kimsey decided to start a business, a franchise seemed like the way to go. Buying a franchise — in his case, a Doctors Express urgent care facility — meant he did not have to start from square one.

Urgent care centers treat common non-life-threatening conditions such as sprains and stomach ailments. Kimsey just needed to get the franchise up and running.

But financing was nearly impossible to get. Kimsey was dealt his first blow when his bank froze his home equity line of credit. Then six banks turned him down for a loan. It took more than a year before he was able to close a deal.


The tough economy has made franchises attractive to the unemployed, workers who don’t want to wait to get knocked off the corporate ladder, and others. But first-time franchise buyers are finding it’s harder than they expected. Lenders reject them because of inexperience or because the franchises are not established brands.

Kimsey had spent nearly 20 years in the wireless telephone industry. He considered Batteries Plus, stores that sells batteries of all kinds.

But ‘‘I was looking for a sizzling sector like cellphones were in the ‘80s,’’ he says.

He had enough money saved for the $55,000 franchise fee and won approval to open the franchise in Sarasota, Fla. He needed $1.2 million to cover between $250,000 and $300,000 in construction costs, $150,000 for equipment, and the remainder for working capital.

The banks gave similar reasons for saying no.

‘‘This isn’t McDonald’s, so we don’t have 70 years of history,’’ Kimsey says. Doctors Express was founded in 2005 and has 54 locations.

And though the company doesn’t require that franchisees have medical training, the banks were uncomfortable with the idea.

There was more: ‘‘We don’t have a lot of assets” that could be collateral.


Eventually Kimsey got a $575,000 Small Business Administration-guaranteed loan. He tapped into savings and about $500,000 from his 401(k) — the entire account — for the rest of the money.

Franchises have suffered in the past five years. The number fell nearly 5 percent between 2008 and 2011. The International Franchise Association estimates the number will rise this year for the first time since 2008.

‘‘Where it’s really having its hardest effect is the aspiring entrepreneur who doesn’t have that track record or that relationship with the banks,’’ says Stephen Caldeira, president of the group.

‘‘The credit score that used to guarantee a loan doesn’t anymore,’’ says Peter Ross, CEO of Senior Helpers, which has 300 franchises that provide in-home care to the elderly. As a result, ‘‘people have to be a lot more creative’’ to raise money to buy a franchise.

Some would-be franchisees, for example, turn to relatives for help.

Rosenberg writes for the Associated Press.