Anyone have experience with Franchise Liquidity Requirements

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by a searcher from Yeshiva University
in Los Angeles, CA, USA

1yr ago

Anyone have experience with Franchise Liquidity Requirements

Does anyone have any experience with franchise liquidity requirements? Is there any way to get around the requirement of $500k of liquidity? I would assume it works differently from a regular acquisition where you can add an investor with a strong balance sheet,

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reply by a searcher 1yr ago
from Duke University in Hillsborough, NC 27278, USA

It is fair to ask them what the liquidity is for and what form is sufficient. My <limited> experience is that the hard dollar targets are something they guardrail against so that others don't jump on board. At the same time, you should be clear as to "why" they require it and what risk you are taking in working capital or otherwise if you negotiate it out.

reply by a searcher 1yr ago
from University of Utah in Irvine, CA, USA

Can’t get around the liquidity other than having a partner with liquidity, but that is an option.

Only other option is to have the seller stay in for 10% and buy them out later.