When it comes to franchising in today's economy with its new-normal lending constraints, restaurant chains are opting for larger, more experienced partners while eschewing mom-and-pop bids.

Even McDonald's Corp. (MCD), which several decades ago regularly took chances on the new single-location entrepreneurs, is now only interviewing people with $500,000 in their own cash and other assets.

DineEquity Inc. (DIN), which has been refranchising its Applebee's chain for the past few years, recently sold another 66 company-owned locations to its largest franchisee, Apple American Group, in part because the franchisee group agreed to accelerate the remodeling plan of those New England locations to be completed by the end of 2012. Apple American Group received a "strategic growth investment" from Goldman Sachs Capital Partners for the deal.

With banks tight on lending in this economy, smaller franchisees not only struggle to secure the opening costs, but are also more likely to have trouble keeping up with remodeling and technology innovation. Professional franchising companies that operate multiple restaurant brands already are less likely to leave a black mark on the brand by failing.

"By working with larger, professional franchisees, the companies can reduce training and support costs," said Dan Prechtel, consultant and president of Franchise Alliance. "It's easier to manage fewer people and ones who already know the industry."

Will Powell, a commercial banker in Bank of America's Credit Products group, said he has seen a lot of consolidation of franchisees recently.

"There are not a lot of net new locations, so the ones that are opening are by multi-unit operators and [private equity] companies because they have the capital to deploy," Powell said.

While the smaller franchisee space, owning two to five units, is still active, he said, the headwinds on the financing side are stronger. When deciding whether to issue loans, "the banks want to see a track record, a history of growing same-store sales, sustainability, transportability, and they want to understand the concept."

The current economic situation is making it next to impossible for new franchisees to show strength by such measures. But if the franchisee successfully operates several other locations and has a relationship with the bank for some time, the bank is more willing to go out on a limb, Powell said.

Dunkin' Brands Group Inc. (DNKN), which operates the heavily franchised Dunkin' Donuts and Baskin-Robbins chains, is willing to work with smaller franchisees. But it, too, is being extra stringent with its screening process to ensure that it is bringing in people with the ability to secure loans and develop their locations on schedule, said Grant Benson, vice president of franchising and market planning.

While the average Dunkin' Donuts franchisee owns only six locations, the company is still looking for candidates with experience operating other restaurant concepts.

"It's certainly more challenging to find franchisees with enough capital to qualify than it's been the past," Benson said. The company requires a minimum of $250,000 in liquid assets to open a Dunkin' Donuts locations and $125,000 for its Baskin-Robbins ice cream shops.

Even though banks are more conservative with lending these days, "the power of the brand and well-known success of our franchisees helps with getting loans," Benson said.

Dunkin' Brands, while it doesn't provide financing itself for franchisees, helps entrepreneurs with their business plans and presentations to the lenders.

"Capital is a challenge," Benson admitted. "It's just not one that we can't overcome."

-By Annie Gasparro, Dow Jones Newswires; 212-416-2244; annie.gasparro@dowjones.com