Mr. Franchise on Investment Requirements

Answer 1

The minimum cash requirement is what you must have available in cash or liquid assets and ready to invest.

Total start-up investment refers to the total in Item 7 of the FDD Franchise Disclosure Document. This is the estimated amount to open the business and it also includes a working capital component, called "additional funds."

Minimum net worth is your total assets minus total liabilities. This is level the franchise company wants you to be at, usually to qualify for a business loan.

More detailed information about tips and traps in franchise investments can be found on the Franchise Foundations website.

Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.