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CrowdFranchise.com offers new twist on crowdfunding

February 4
8:27 AM 2014

Now ordinary folks can purchase ownership in a franchise for as low as $1,000 with the online business launched by Forever Yogurt Co-Founder and Chief Executive Officer Mandy Palara, Tampa Bay Times reported.

In December, Palara rolled out CrowdFranchise.com with the aim of growing his self-serve yogurt chain that currently has 24 shops. With his platform, he also hopes to eventually link investors with other franchise ideas. Palara is seeking to promote nine new franchises that will be owned by the group which includes one located in Tampa and another in Miami Beach where Forever Yogurt has an outlet in Ocean Drive, the report said.

CrowdFranchise.com operates in the same manner as Kickstarter, Indiegogo and other crowdfunding platforms. The difference, however, is that investors acquire ownership of a franchise whereas crowdfunding sites donate funds to help make a new product or allow an organization or campaign to kick off, the report said.

Investors are able to cast their votes on matters about the franchise and receive a portion of profits made depending on how much of the franchise they own. Determining the locations for the store as well as management are taken care of by the corporate office. Investors only lose their initial capital if the business folds but will not be held responsible financially, the report said.

The idea of crowd franchising came to Palara after he began to franchise Chicago-based Forever Yogurt which was established in 2010. While there were a lot of investors who signified their interest about the product, not all of them had the $350,000 to $400,000 for the franchise.

He told Tampa Bay Times, "We were looking for new ways for interested franchisees who did not qualify individually to open a store. We wanted something that the average income investor could participate in.''

Forever Yogurt has already obtained 19 pledges from 19 investors amounting to $402,000 to build an outlet in Wicker Park. However, it would need $650,000 in order to open the store, the report said.

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