What is the minimum equity/ capitalisation ratio?
Naturally the individual or organization should have the necessary financial resources or access to funds required to sustain the operation in the vital initial set up stages. The normal ratio is 50%. This means the Franchise owner needs to come up with their own capital equivalent of 50% of the total investment needed. The other 50% can be from borrowing from the normal sources. For example your fixtures may be leased and paid for out of cash flow to reduce your initial capital outlay.
