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Criteria for starting a franchise - Q & A

Katrina has a question about learning the criteria for starting a franchise.

Rich Sloan:   We're going first out to the nation here to Katrina, out of Lawrenceville, Georgia.  Welcome to our show, Katrina.

Katrina:  Hello.

Rich Sloan:   How can we help?

Katrina:  I was calling because I had a question.  My husband and I are looking into starting up a small business; however we were looking into franchising, as well.

Rich Sloan:   Yes?

Katrina:  And we were wanting to know how to -- every criteria for the franchising is, you know, you have to have 750,000 liquid assets or you have to be worth, like, a million dollars.  And we just really want to know how do you get around that?  I mean, our goal is to get there, but you know, somehow we need to get around that.

Rich Sloan:   Yeah.  Well, I think you need to do some more research and I'll tell you why.  Because I think there are some franchises out there that are probably high quality.  They're run well by the management, and they don't require a significant amount of capital to start.  In other words, some franchises deal with a brick and mortar business.

Katrina:  Uh-huh.

Rich Sloan:   But some franchises don't deal with a brick and mortar business and you can run them from your home.  And there might be, for example, an online business that you could do very inexpensively, where they require less capital up front or less net worth that you have to have in order to qualify. 

Katrina:  Okay.

Rich Sloan:   So and that scenario comes down more to if they are very high quality, they're going to want to make sure that you also are very high quality.  And quality isn't just what your net worth is, but also what's your business experience, what are you going to bring to the table.  And you need to make sure --

Katrina:  Right.

Rich Sloan:   -- you have the experience there.

Katrina:  Right.  Well, we have experience, but we don't have all the experience.  And, you know, of course we're willing to go back to school and do whatever it is we want to do.  It's in the restaurant industry.

Rich Sloan:   Okay.

Katrina:    And so, you know, we just don't know how to get around all of that financial being there.

Rich Sloan:   Well, there are a few ways to handle this.  Either you choose a different concept, a different franchise that doesn't require that capital --

Katrina:  Uh-huh.

Rich Sloan:   -- or you find someone to finance you guys.

Katrina:  Okay.

Rich Sloan:   I mean, it really comes down to that.

Katrina:  Okay.  So, we're just going to have to find the money.

Rich Sloan:   That's probably the case.

Katrina:  Okay.

Rich Sloan:   And if you want help with that, you can go to StartupNation.com and go into the "Ten Steps to Open for Business."

Katrina:  Right.

Rich Sloan:   And step number six is "Find the Funding."

Katrina:  Uh-huh.

Rich Sloan:   And that should provide a lot of ideas for you on what kind of funding is available and how to do the networking to get that money.

Katrina:  Okay.

Rich Sloan:   Good luck to you, Katrina.

Katrina:  Thank you.