The old saying, “If you have to ask the price, then you can’t afford it” doesn’t necessarily always apply when it comes to deciding whether or not to buy a franchise.

Naturally, while we all have some type of limit to our financial resources, don’t let the cost of investing in a franchise drive you away on the first look. In fact, certain types of franchise acquisitions can range from as low as a few thousand dollars, depending upon the industry.

Let’s review some of the franchise due diligence steps and the varied options that you might have with regards to financing such a proposal.

First, sit down with your family and conduct a self-evaluation of your personal financial status. Ask and answer yourself truthfully these types of questions:

• Do you have liquid assets available for this business venture?
• Are you aware that the return on your investment may take a few years?
• What are your cash flow and debt-to-income ratios?
• Will you still have enough resources (6 months) for a “rainy day” occurrence?

Involving an accountant or financial adviser in this analysis is also highly recommended. Also, it is a good idea to speak with current franchisees to ascertain some realistic examples of their financial experience with the franchising corporation and how they funded their business.

Of course, the franchisor will also be able to provide a Franchise Disclosure Document that will contain significant amount of financial data about their company. Read the FDD carefully, but don’t rely on that alone to make your final decision.

So, where else can you go to get additional funding resources besides your brother-in-law? Don’t laugh – family, and even friends, may have an interest in investing in your enterprise. Here are a few other suggestions for starters:

• Obviously, personal savings are frequently used
• Despite the economy, if you have a viable business plan, a bank loan might be feasible
• Another consideration would be to check into borrowing from your home’s equity
• The Small Business Administration offers advice in addition to loans
• You may incur a penalty, so carefully investigate the option of borrowing from your 401k
• Researching the Internet, publications and books can open other possibilities

Last, but not least, you should seek the counsel of a reputable franchise consultant who has the experience and know-how to navigate through the maze of paperwork, regulations and financial due diligence to make your dreams of being a franchise owner a reality.