I am in the preliminary process of applying to buy a franchise and have encountered a delima. My original intent was to build a new franchise in a hot market in Tennessee, costs not to exceed 450K. My bank reviewed my personal financial statement, stated everything looked good and began preparing to submit to the SBA.

However, I recently discovered this same franchise available for sale at a REAL bargain (150K) in a town an hour away (owner has several personal issues and needs to sell...store sales are very good). This bargain store has 80K in equipment, and current owner paid a total of 205K to open in 2002. The location is a leased unit in a strip center.

It is my overall goal to own 3 or 4 of these franchises. How can I buy both without over extending (in the lender's eyes) or liquidating all my capital? Can I use the first store as collateral for the second store? My bank suggested that I buy the first store for 150K, then resubmit for the 450K store, all as a SBA loan. I am concerned that if I purchase the 150K store, I will lose financing flexibility for my orignal intent...building the new store for 450K. ANY info or direction is appreciated!!