Franchise screening runs on two financial numbers that people routinely confuse: liquidity and net worth. They answer different questions, and a candidate can pass one while failing the other. Screening well means knowing which is which.

Liquidity: can they fund the deal?

Liquidity is cash and near-cash — money the candidate can deploy without selling a house, liquidating retirement accounts at a penalty, or borrowing. It answers the immediate question: can this person write the cheque the concept requires?

A candidate with $2M in property and $40K in cash is wealthy and unqualified for a concept needing $150K liquid. This mismatch is one of the most common ways pipelines fill with people who look excellent on paper and cannot close.

Net worth: will they survive underwriting?

Net worth — total assets minus liabilities — answers a different question: will this candidate clear the franchisor's financial screening and support financing if needed? Lenders and franchisors read the whole balance sheet, not just the cheque being written.

Net worth also indicates resilience. A candidate investing their entire liquid position has no buffer for a slow first year. Strong net worth behind the investment means the candidate can weather the ramp — which is very much your concern, because a failed unit is bad for everyone.

How they interact

The four combinations tell the story:

  • High liquidity, high net worth — the ideal candidate; fundable and resilient
  • High liquidity, low net worth — can fund the deal but may be stretched; dig into what the investment represents relative to their position
  • Low liquidity, high net worth — asset-rich, cash-poor; possible, but only if assets can be sensibly converted or leveraged
  • Low both — not a candidate for this concept, whatever their enthusiasm

Screening on both, in practice

Ask for the two numbers separately and explicitly: "What liquid capital are you planning to invest?" and "Roughly what does your overall financial picture look like — assets versus debts?" Candidates who have thought seriously about ownership know both. Candidates who conflate them usually have not.

Then match against the concept's requirements on both axes — the liquid minimum and the net worth threshold — not just the headline investment figure.

The verification layer

Both numbers are claims until someone confirms them in a real conversation with follow-up questions. Self-reported forms are reliably optimistic. This is why our tiers are defined by call-verified liquidity and net worth bands — Bronze, Silver, and Gold each represent a confirmed financial level, so both numbers arrive checked, not merely stated.

If you want candidates screened on both figures before they reach your calendar, see the tiers or get in touch.