E43: Franchise Financing is Getting a Reinvention! With Franchise Now

Hosts: Michael Hyam and Liane Caruso
Guests: Sam Phelps, President of Franchise Now, and Derrick Skogsberg, Chairman and Founder of Franchise Now

Learn how Derek Skogsberg and Sam Phelps of Franchise Now are solving franchise financing’s biggest problems with technology, speed, and a simple promise: “When they sign, we pay.”

For nearly 25 years, Derek Skogsberg has been at the forefront of franchise financing innovation. But even he admits his first attempt at solving the industry’s problems, while well-intentioned, was placed at the worst possible point in the development cycle.

Now, with the launch of Franchise Now, Derek and his team, including President Sam Phelps, are correcting that mistake with a platform that fundamentally reimagines how franchise financing works.

Podcast Summary: The Franchise Now Team Is Solving a Key Problem In The Franchise Financing Process

The Problem: Asymmetric Information and the “Apollo 13 Effect”

Sam Phelps, a self-described “recovering banker,” identified the core issue immediately when he entered franchise financing: asymmetric information. Too often, critical details about funding status, candidate qualifications, and deal progress are hidden behind phone calls, manual processes, and mysterious waiting periods.

Derek describes this phenomenon as the “Apollo 13 effect”—candidates get sent to a funding company, disappear around the moon where no one can contact them, and developers cross their fingers hoping they come back with a big sack of cash.

As Derek puts it: “Those days are absolutely over.”

The Solution: Pre-Qualification in 10 Minutes or Less

Franchise Now’s platform leverages AI and deep technical expertise (led by former UnitedHealthcare Chief Technology Officer Rick Watson) to deliver something the industry has never seen:

Instant pre-qualification. 

Here’s how it works:

• A franchise developer enters just three pieces of information: name, phone number, and email address
• The candidate’s phone goes “ding” with a notification
• In 10 minutes or less, both the developer and candidate receive:
  • Complete credit information
  • Financial data and DTI (debt-to-income) information
  • A pre-qualification letter specifying transaction types and amounts

No more “flopping it over the fence to finance company du jour and letting them work their magic.” No more waiting days or weeks for answers.

“When They Sign, We Pay”

The name says it all: Franchise Now. Not “Franchise Next Week” or “Franchise When We Get Around To It.”

The platform’s revolutionary approach includes:

Immediate franchise fee payment: 

When a candidate signs the franchise agreement, Franchise Now pays the franchisor the same day or next, depending on bank cutoff times

15-second processing: 

Files move from processing to underwriting in just 15 seconds (compared to days or weeks with traditional manual processes)

Real-time bank tracking: 

For the first time ever, franchisors can see when deals actually move at the bank—information that appears instantly on their dashboard

Transparency Across the Entire Journey

Every activity inside Franchise Now is time and date stamped. Developers can track:

• How many candidates are in each stage of the financing process
• Where candidates tend to stall out (and why)
• Differences between brands for multi-brand franchisors
• Real-time bank activity and file movement

As Derek explains, this creates three critical elements the industry has lacked: accountability, control, and transparency—specifically for the people who need it most: franchise developers and operations teams.

The “TurboTax Approach” with Frank the AI Owl

Sam describes their technology philosophy as the “TurboTax approach”—breaking down complex government forms and financing requirements into simple, step-by-step questions that anyone can answer.

And if candidates need help? Meet Frank, the Franchise Now AI assistant who:

• Works 24/7 (he’s a night owl, after all)
• Is trained on FDDs, industry data, and Derek’s quarter-century of franchise financing expertise
• Provides context-specific help for each section of the application
• Can answer everything from ownership structure questions to NAICS codes

But human support is always available too—candidates can raise their hand anytime for personalized assistance from the experienced Franchise Now team.

Franchise Fee Payments Are A Proven Business Model 

This isn’t just theory. Derek has been doing franchise fee down payments since 2016 through Tenant Financial Group’s FFDP program, completing an estimated 500 deals. He proved the business model worked; he just needed the right technology to scale it properly.

That technology finally arrived with the convergence of AI capabilities and the deep IT bench strength Derek assembled, including Rick Watson, CFO Jamie Hogan (former owner of the largest accounting firm in franchising), and VP of Development Dave Wogan.

What Franchise Now Changes

For Candidates:

• Clarity instead of opinions
• Facts delivered early in the process
• The ability to work at their own pace, even Saturday night at 11 PM
• A comfortable, world-class experience without unnecessary hand-holding

For Franchise Developers:

• Control over their own process and candidates
• Immediate qualification data without phone tag
• Clear signals about candidate interest through their actions
• Time to focus on viable deals instead of chasing updates

For Franchisors:

• Faster time to royalties (potentially 3-6 months faster)
• The franchise fee paid upfront, enabling operations to start onboarding immediately
• Some candidates have even made sales before their SBA loans funded
• Unprecedented visibility into the entire financing pipeline

For Operations Teams:

• Real-time visibility into loan progress through underwriting, closing, and funding
• The ability to begin onboarding while financing is still in process
• Candidates who are already operating or ready to turn on the lights the moment funding closes

Learn More About Franchise Now

As Sam wisely notes: “A quick no is sometimes as valuable as a yes.” When you’re multiplying by zero, it doesn’t matter what else you charge—the result is still zero.

Franchise Now empowers the entire industry to separate viable deals from those that need more time, compress timelines, increase pull-through rates, and have more intelligent conversations based on real data instead of guesswork.

Derek’s mad scientist sketch on his office whiteboard—boxes, arrows, colors, and what he calls “a mess”—has become a sophisticated platform that’s poised to reinvent franchise financing.

The road to innovation is winding and bumpy, as Derek knows well. But after 25 years at the tip of the spear, he and his exceptional team have arrived at something transformational.

Visit franchisenow.com or reach out to Sam Phelps at sphelps@franchisenow.com.

Note: Tenant Financial Group will continue operating as the premier plan administration firm in the industry, focusing on what they do best—exceptional ROBS (Rollover for Business Startups) administration.

Listen to the full podcast episode now to hear more from Sam, Derrick, and the LFG Podcast team!