The BizBuySell Small Business Community

  • Get Expert Advice

  •  • Find Local Service Professionals

  •  • Share Your Experiences

Question on the structure of Franchase financials

In franchase advertisements usually it is mentioned cash requirement and the net required for the business. Let say investment needed 80,000 USD and net ranges between 150 -300K. As I understand 80K cash is what I invest. Where is the rest amoun coming from?

No User Photo

Answer This Question

max 5000 characters

Web Reference (optional)

e.g., "www.mywebsite.com"

Review Community Guidelines

Help keep our Community clean and on topic. The BizBuySell Community is a place where you can discuss your questions, concerns and knowledge with others you can trust. It is not OK to use this forum to solicit others for personal or financial gain, or to rant about personal issues. It's all in the guidelines.

Submit Your Answer
Answers (4)
No User Photo
Great Day Moving
Consultant
Jackson County, MO

There's a ton of ways to find transparency to this question. Capital is just as crucial as the down payment or initial startup fees.

Nov 2, 2012
Paul E
Front Line Plans
Business Plans for Entrepreneurs
Westchester County, NY

What they are saying is that you will invest approximatley $ 80,000 BUT they want you to have a net worth of 150-300. They don't want you running out of money while it builds and they don't want you if you are investing your last dollar.

Also, the capital funding deal is one of the oldest "loan" scams going. they will guarantee you a loan at 100% (right) no credit check(right) no collateral (right).......at the last minute they will want a "lockup fee' or some other up front fee to "close" the loan. Then you never hear from them again.

Jun 13, 2012
No User Photo
The BAF Group LLC
MD

We did a due diligence study on this "lender", Capitalfunding Loan and Lending. The company's own bank says it apparently does not exist. Moreover, when the representative called me on the phone, the telephone number was not from Manchester, UK, as the company is supposed to be located; the Country Code is "234". Google that number and you will be surprised - or not!

May 24, 2012
No User Photo

Basically borrowing in one form or another. It may not be as simple as a straight forward loan with the bank. More than likely, additional assests will be used in some form or fashion to finance/insure that the balance of the projected financing needs will be met.

What I'm trying to say is, DO NOT think that ONLY the $80,000 cash will be at risk if they require you to have a net worth of say $200k. The extra net worth will come into play somewhere in the development and growth of your franchise.

May 23, 2012

Start a Discussion