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How can franchise businesses use EB-5 capital?

We currently own several Best Western franchise hotels in Texas. We want to know if franchise businesses could independently use EB-5 capital without involving the franchisor or the parent company. If so, do we have to partner with a regional center to promote our project?

Answers

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    Ed Beshara

    Immigration Attorney
    Answered on

    First, retain the services of an experienced EB-5 attorney. Your EB-5 investment can be in a franchise business and you also need to show how 10 full-time jobs can be created.

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    Daniel A Zeft

    Immigration Attorney
    Answered on

    You need a consultation appointment with an immigration attorney and a corporate and securities attorney who are knowledgeable about EB-5 matters.

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    Stephen Berman

    Immigration Attorney
    Answered on

    I'm sure there's a way to do it.

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    Phuong Le

    Immigration Attorney
    Answered on

    Provided that there's nothing in your development agreement or franchise agreement that prohibits it, sure. You don't have to partner with a RC, but it may be easier if they can actually help you raise EB-5 capital.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    You can do it as a direct project. Each franchisor has its own rules, though, so that would need to be explored to see if the project can be in your name purchasing the franchise.

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    Marko Issever

    EB-5 Broker Dealer
    Answered on

    You do not have to get any regional center involved in your project. That would be optional. Of course, there are significant advantages to having a regional center get involved, as far as job creation is concerned. With the direct investment option, you can only count full-time direct jobs. With the regional center option, you can count indirect and induced jobs as well. Many times, this difference becomes significant from a profitability standpoint. EB-5 investors must create 10 new full-time positions as a result of their investment. There has to be a compliant business plan. As long as you work with a qualified immigration attorney, they should be able to advise you on the route you should take in terms of direct investment or regional center partnership. As far as whether or not you need to get the franchisor or the parent company involved, this would be more of a business understanding issue rather than an EB-5 application issue. You might want to check on the terms and conditions of your franchising agreement to determine your rights and obligations and restrictions if any, of sourcing outside capital through any method including EB-5.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    Best to partner with a regional center and best to use for new Best Western franchise hotels to be built.

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    Charles Foster

    Immigration Attorney
    Answered on

    Yes, you could make your franchise hotel business EB-5-compliant, depending on any contractual terms with your franchisor or parent company. You would use a regional center for a number of advantages, but direct EB-5 investment also possible.

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    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    It all depends on your choice of the corporate options. However, in a situation with multiple assets as this, it is advisable you should sort out the business organization you really preferred. For example, if you intend to operate with a holding company, acting as the parent company for all the hotels your option of fulfilling EB-5 requirements is wide open, as the emerging holding company coordinates all your EB-5 investments. Under this scenario, you should be able to easily operate as a direct investment entity or seamlessly with a regional center. Advisably, consult an EB-5 attorney for further analysis of your options.

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    BoBi Ahn

    Immigration Attorney
    Answered on

    You do not need to "involve" the franchisor beyond including the franchise agreement when submitting the EB-5 petition, along with the other required documentation. And no, you are not required to file through a regional center to promote your project.

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