The first element for EB-5 eligibility is relatively easy to establish. The typical minimum amount of EB-5 investment is $1 million; however, if the location into which the investment is made is considered a Targeted Employment Area (“TEA”), then the minimum investment amount is $500,000. There are certainly many cases in with the investment threshold required to launch a franchise will meet or exceed the EB-5 threshold. Therefore, the investor must be diligent in researching the best possible franchise option if the ultimate goal is EB-5 qualification.
by Lauren A. Cohen, Esq.
Notwithstanding the investment amount, the potential investor should not blindly choose a franchise because not all franchises will offer the ability to create the requisite 10 full-time positions. A franchise such as a restaurant will require significantly more employees; however, there are other franchises that will not create as many jobs. Additionally, if an immigrant purchases an already established franchise location, the immigrant investor cannot count the already-established job creation within the existing franchise location. Consequently, the investor must thoroughly research the potential franchise offerings.
One of the advantages of a franchise agreement is that the buyer or the franchisee will utilize that company’s successful business model and brand name to operate an independent branch of the company. By reviewing and analyzing the franchise’s business model, the franchisee will be able to ascertain how many employees must be hired in order to run a franchise location adequately. The franchise opportunity is especially helpful if an immigrant does not have much business experience. If the immigrant buyer wisely chooses the franchise that is well-established, this will eliminate the difficult work of advertising an unknown business. For example, a franchise such as Dunkin Donuts is already established, so customers will recognize the name and will know what to expect from the business. Additionally, a franchise agreement typically includes marketing and training support to the franchisee employees which again helps those investors who do not have a business background.
In conclusion, the franchise route is an acceptable way to obtain an EB-5 Visa, but the immigrant investor must diligently consider all possible franchises and must carefully weigh the pros and cons of each option. If one chooses a well-established franchise that is in a TEA and will easily create the requisite number of jobs, this will likely make the process of convincing USCIS that much easier.
Lauren A. Cohen, Esq., is founder of www.ecouncilinc.com. She developed e-Council Inc.com to focus on designing professional Business Plans for all types of business visas, with a special focus on EB-5 projects for direct investments and regional centers.