504 Success; A Sweet Deal

Being able to bring Dunkin Donut Hole Treats (Munchkins) and Baskin Robbins ice cream to Spring Hills, Hernando County was sweet for owners of the local franchise and for all the tourists that visit this well-known and historic part of Florida. Hernando County is located just thirty-five miles north of Tampa and is known nationally for the tourist attraction Weeki Wachee Springs and vacations under spreading oaks along the Withlacoochee River.

To better serve the hordes of year-round tourists that visit the area and a rapidly growing population, Cathleen and Francis Cavanagh will soon open their third location in Spring Hills thanks to a 504 loan from Florida First Capital Finance Corporation (FFCFC). With most of their capital tied up in their first two locations, this expansion would have been impossible for them except for the fact that owner’s cash injection requirement was only 10% using the 504 and the low interest rates available under the program.

Although Dunkin Donuts is the largest retailer of coffee, donuts and bagels in the world (over 6,100 locations in 30 countries and selling over 2.7 million cups of coffee per day), the parent corporation takes a great deal of time and effort to make sure that each individual franchise is successful. For instance, all franchisees must attend a six week long course of instruction and Dunkin Donuts University in Quincy, Massachusetts and must pass a rigorous exam at the end of the course. Thus, both Mr. and Mrs. Cavanagh were well trained before starting on their first franchise venture.

Dunkin Donuts itself is owned by a British company, Allied Domecq, which also owns the Baskin-Robbins Ice Cream and Togo brands. Both Cavanaghs attended schools in Hernando County and had broad business experience prior to taking on the difficult task of owning and operating their franchised stores.

Most banks will not finance restaurants of any kind and it’s only because of the way that the 504 loan projects are structured that this financing was possible. What makes a 504 attractive to a bank is that the bank only has a 50% loan to value which makes their portion of the project practically risk-free.

Founded in 1984, FFCFC is the fourth largest SBA licensed Certified Development Company (CDC) is the nation and has made loans in more counties in Florida than any other CDC.

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