Finding capital seems to be a theme here lately. Clearly I own a franchise business that is seasonal. Had I been smart, I would have got a business line of credit in place years ago.

Though I love the concept of franchising, there are some flaws. No one teaches you to think 3-4 years down the road. If I ever start my own franchise, I’m going to require franchisees to set aside 1% of their sales as a forced “rainy day fund”. These dollars will only be available if the business reaches certain “red flag” cash flow levels…or every 3 years the franchisee could take 50% of the funds they had put aside if the business was hitting decent numbers. Anyways, I have yet to work out the specifics, but it truly seems like a good idea. I’ve reviewed hundreds of franchises, and I’ve never once seen anything like this mentioned. It would be great if I had done something like this, because when things are temporarily tight in the checkbook, cash can sometimes be hard to come by.

Well, live and learn…and do things better next time!

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