OKLAHOMA CITY, Okla. — Greg Costley doesn’t need the Small Business Administration’s assistance to secure entrepreneurial capital at BancFirst anymore because his first experiences as a new restaurant franchisee years ago were so successful.
Mostly successful, that is.
“My third store out in Shawnee almost killed me,” Costley said. “I had to shut down and then I spent seven years paying that store off. But they saw me start; they saw me struggle; they saw me come through it and keep my commitments and obligations.
“It’s been 18 good years now with BancFirst as my partner,” Costley said, adding that he’s repaid several million dollars and still holds $4 million more in debt for a Cici’s Pizza chain that now spreads from Corpus Christi, Texas, to Kansas City, Missouri.
“Because of my payment history and credit history, I don’t really have to do SBA loans anymore,” he said. “My paperwork is still generated out of the SBA department because of our long relationship, but I think they move it another part of the bank now.”
Kent Faison, BancFirst president of commercial capital, called Costley the epitome of a good customer, SBA-backed loans or not. He praised Costley’s work ethic and integrity and said many other borrowers are following in his footsteps through the SBA.
According to the SBA, CiCi’s Pizza restaurants have been some of the most active chain brands in the administration’s guaranteed loan program so far in fiscal year 2017-2018, along with Marco’s Pizza and All About Cha, a fairly new chain that focuses on teas and other drinks.
SBA spokesman Larry Weatherford said the experience of buying into a chain doesn’t necessarily help a new borrower. A franchise contract can provide structure, minimum operational standards and clear business goals, he said, but the same model can also create additional strain for its inflexibility. Loan success is determined by a combination of the applicant’s personal attributes and solid business plan.
Faison agreed: “A franchise may help, because there are some established policies and procedures and operating ideas that people can jump into immediately. However, it really always comes down to the individual and their work ethic and their level of integrity.”
And not all company chains share the same idea of fiscal health.
“Some are more interested in selling franchises than in creating a successful franchisee,” Faison said. “That’s the exception rather than the rule. But the more successful franchisors will provide a higher level of support for their franchisees.”