Planning for Growth During Economic Uncertainty

Franchise operators are facing a uniquely unsettled environment: tariff policies remain unresolved, inflation trends remain uneven across sectors, and interest rates have steadied but remain high enough to require more intentional planning. In such conditions, growth is still possible — but it requires discipline, foresight, and financial preparedness. “Volatile markets don’t shut down growth — they simply reward the operators who prepare the most.” says Travis Perrine, Director of Business Development at ApplePie Capital.

Here are some key actions operators can take to strengthen their financial position and navigate expansion with greater confidence.‍

Strengthen Liquidity: A Defensive Tool and a Growth EnablerLiquidity is strategic.

It gives franchisees room to maneuver when conditions change and the ability to act quickly when opportunities arise.

Recapitalization & Refinancing as Planning Tools
Recaps and refinances can:

• Consolidate debt into more flexible structures
• Remove restrictive collateral requirements
• Improve cash flow and make it more predictable
• Unlock capital for acquisitions or expansion
• Provide resilience against tariff-driven cost spikes or shifting inflation
  
  

Tools like Recap & Grow® allow operators to leverage existing equity — often up to 4.5× trailing 12-month EBITDA — to pursue growth without stretching cash reserves. “Liquidity is leverage. The more liquidity you control, the more choices you have.” Travis emphasizes.

‍Be a Prepared Borrower: Ask Lenders the Right Questions

Lenders vary dramatically in their structures, and in uncertain markets, those differences matter. Franchisees should be proactive and rigorous in evaluating financing partners.

‍About Flexibility & Risk

• Do you have prepayment penalties?
  Penalties limit the ability to refinance when rates improve. They also can restrict your access to the equity you have built in the business
  
  
• Do you take personal collateral?
  Some lenders require pledging personal assets.
  
  
• Will you cross-collateralize my other businesses?
  Cross-collateralization can restrict future expansion or refinancing options.
  

About Loan Usability & Structure

• Is your loan term less than 10 years?
  Shorter terms increase monthly payments and reduce cash flow.
  
  
• Do your loans cover at least 80% of all Item 7 costs?
  Less coverage = more cash you must provide upfront.
  
  
• Do you only offer multiple disbursements?
  Multiple disbursements can slow openings and complicate vendor payments.
  
  

The wrong loan structure can make a good unit feel like a bad one. The right structure can make uncertainty manageable.

Clean, Transparent Financials: Your Most Underrated Growth Advantage

Clean financials signal strength — to lenders, franchisors, investors, and potential sellers.

Remember: A low tax bill is not always good for growth

Many operators try to minimize taxable income, but aggressive expense strategies can reduce the EBITDA lenders are willing to count. This directly hurts borrowing capacity.

Keep a clean P&L

Avoid running personal or hard-to-explain expenses through the business. Messy financials can:

• Slow down underwriting
• Cause lenders to haircut EBITDA
• Reduce valuation in a recap
• Limit acquisition financing
• Lead to unnecessary loan declines

Clear, well-documented financials build credibility. It's one of the simplest — and most overlooked — ways to prepare for growth.

Identify Strong Acquisition Opportunities — Especially in Uncertain Markets

Periods of volatility often uncover attractive opportunities, especially distressed or undervalued units.

According to the AcquisitionEdge guide, franchisees — including first-time operators — can leverage acquisition financing with features like:

• Up to 85% financing of total project costs
• Limited collateral requirements
• No personal collateral (just a guarantee)
• Streamlined underwriting without third-party valuations
• No prepayment penalties
• 10-year terms for stability
  
  

Through a Recapitalization loan you can even acquire units that may be struggling for fixable reasons: poor operations, liquidity strain, or ownership fatigue. “Distressed doesn’t mean doomed. Strong operators can turn undervalued units into some of the best performers in their portfolio.” says Travis

Stress-Test Growth Plans Against Multiple Economic Scenarios

Given the uncertainty around tariffs, inflation trajectories, and Fed policy, franchisees should build plans that hold up across a range of assumptions.

Stress-test for:

• Labor cost increases
• Tariff-related supply or equipment cost spikes
• Slower customer traffic or price sensitivity
• Higher working-capital needs
• Delayed break-evens
• Rate fluctuation scenarios
  
  

This mindset doesn’t constrain growth — it strengthens it. Operators who plan for multiple outcomes avoid overextending and maintain flexibility to capitalize when conditions shift.

Build a Bench of Trusted Advisors Before You Need Them

In unpredictable markets, franchisees benefit from advisors who understand the system: accountants, lenders, brokers, and financial specialists.

A seasoned advisor can help:

• Determine true borrowing capacity
• Prepare clean financials and tax positioning
• Evaluate acquisition pricing
• Anticipate liquidity needs
• Structure debt to match your long-term goals
  
  

The best time to make yourself financing-ready is before you’re buying, building, or refinancing — not during.

Grow Selectively: Strength, Discipline, and Durability Win

Growth in uncertain markets is most successful when it's:

• Selective — choosing markets with durable demand
• Disciplined — prioritizing units with proven EBITDA
• Strategic — acquiring when basis and conditions are favorable
• Supported by liquidity — through recapitalization or optimization
  
  

Speed matters less than stability. Operators who build from strength outperform those who chase expansion without preparation.

Conclusion

Uncertainty does not eliminate opportunity — but it sharpens the need for financial discipline, lender readiness, strategic liquidity, and thoughtful acquisitions.

Franchisees who clean up their financials, ask lenders the right structural questions, strengthen liquidity, and build a team of trusted advisors will be positioned to grow regardless of where tariffs, inflation, or rates ultimately settle. Says Travis, “You don’t have to predict the market — you just have to be prepared for it.”