If the terms are right, I think this is the only form of financing that is OK for a new franchisee to undertake. In a certain sense, this insures that the seller is invested in your future success. Be sure to get generous terms: a low rate of interest, interest only payments for the first number of years, a long amortization period after that, and a long time before a balloon payment is due. Also, be sure NOT to secure the debt with any other assets you may have, such as your house, car, retirement savings, etc.