The Franchise Finance product is aimed at assisting black entrepreneurs who wish to acquire a franchise license. The product is aimed at entrepreneurs who wish to start their own businesses by buying a franchise linked to a particular brand to reduce risks associated with start-up businesses lacking a track record.

The key criteria of this product are:

• The NEF prefers to fund well established franchise concepts
  
  
• Active management involvement by BEE parties is required
  
  
• Minimum BEE shareholding of 50.1% is a requirement
  
  
• Transactions will be structured with sustainable capital structure
  
  
• BEE party must have been pre-approved by the franchisor before approaching NEF
  
  
• NEF funding generally limited to R5 million
  
  
• NEF will fund SME; using mainly debt
  
  
• NEF funding is charged at prime linked interest rates
  
  
• The NEF will exit from the investment in 5 to 7 years