Opening a Franchise as an EB-5 Investment: Everything You Need to Know
Welcome to the United States! As a foreign investor looking to establish yourself, perhaps also your family, in the U.S., you have several options open to you. If you have the drive and the capital available, then opening an EB-5 franchise may be your best choice.
What is EB-5?
The EB-5 immigrant investor program is a program the U.S. Citizenship and Immigration Service administers for prospective business owners seeking to immigrate to the U.S. The program allows foreign investors like yourself to apply for a green card by investing in a qualifying commercial enterprise in the U.S. and planning to create and preserve 10 or more permanent, full-time jobs for qualified U.S. workers. The name EB-5 comes from how participants in this program receive an employment-based fifth-preference visa.
What Qualifies as an EB-5 Business Idea?
If you’re looking for EB-5 business ideas, it’s important to keep in mind the qualifications. To qualify for a visa, you must invest at least $1.8 million USD in your business, or $800,000 in a targeted employment area (TEA). Qualifying TEAs for this program are either rural areas or areas experiencing high unemployment. If you’re investing in a pre-existing business, there may be additional requirements. If you invest in a commercial enterprise established prior to Nov. 29, 1990, the enterprise must change into a new business or expand to add at least 40% to its net worth or employees.
EB-5 Franchise Opportunities
Now that you know what’s required for an EB-5 franchise, you need to decide how you’re going to establish one. Starting your own business from scratch requires a good deal of business acumen, not to mention knowledge of whatever industry you’re starting. Additionally, depending on which country you’re immigrating to the U.S. from, the domestic market here may be unfamiliar territory for you. Industry standards and U.S. regulations may also be different to you.
Investing in a franchise can be a good way for a newcomer to the U.S. to start their own business. A franchise location ensures you’ve got a ready source of advice and guidance in the franchisor, as well as fellow franchisees. The franchisor can also help connect you with the necessary service providers, such as suppliers, as well as provide you with services of its own, like market research and advertising. Franchises often have prospective markets already scoped out, which will help take the guesswork out of finding your best choice for an opening location. The motto of franchising is “in business for yourself, but not by yourself,” which for a newcomer to both the country and your market of choice is a good position to be in.
While the advantages of investing in a franchise are noteworthy, it’s important to also consider the challenges it may bring. As a franchisee, you will need to meet the requirements of your franchise agreement, particularly following the franchise business model. Franchisors also charge a fee for the use of their brand and separate fees for various support services such as marketing and business consulting. Finally, depending on the franchise, the initial investment and staffing requirements for a single franchise location might not be enough to meet the EB-5 qualifications, so you might need to invest in multiple franchise units to qualify.
Get Your Business Off the Ground with Launch
If an EB-5 investment opportunity sounds like the right path for you, then Launch Entertainment is a great option. Launch Entertainment is a part of an industry that is expected to keep growing for years. According to the Allied Market Research Study, the Family Entertainment industry generated $25.14 billion in 2021, employs more than 61,000 people and has 6,000+ total locations in the United States. The industry is expected to grow to more than $69.55 billion over the next five years, a 10.9% CAGR. Your initial investment will meet EB-5 qualifications, and with Launch’s eye toward expanding territories, there’s lots of room for growth in the U.S.
If you want to learn more about franchise advantages with Launch, and how to get started with Launch, fill out a contact form today!