Capital requirements refer to the total financial resources a prospective franchisee must have to invest in and operate a franchise business. This includes liquid capital, total net worth, and access to additional financing if needed. These requirements help ensure that franchisees have the financial capacity to cover startup costs, working capital, and sustain operations during the early growth phase. Capital requirements are typically disclosed in the Franchise Disclosure Document (FDD), particularly in Item 7, and can vary widely depending on the franchise type and model.
Capital Requirements
This term
Capital requirements represent the financial resources needed to open and operate a franchise.
Joe Bailey
Lead Franchise Advisor & Owner
At Franchise Reports, the goal is simple: help you find better franchises.
