Franchise Glossary
Liquid Net Worth
What is Liquid Net Worth in franchising?
The portion of your total net worth that is readily accessible: liquid assets minus short-term liabilities. Lenders and franchisors use liquid net worth to assess whether a buyer has the financial cushion to sustain the business through its ramp-up period. A buyer with a $2M net worth tied entirely to real estate and retirement accounts may have a lower liquid net worth than the brand's minimum requirement.