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Liquid Capital Franchise Costs & Fees

Date of Incorporation: 1999
Franchising Since: 1999
Headquarters: Irving, Texas

Business Description: Liquid Capital offers a franchise for a business that offers factoring and other financing services.

Franchise Offer: A Liquid Capital franchise gives the franchisee the right to offer the factoring, purchase order financing, asset based lending, merchant financing, and other approved financial services provided by a Liquid Capital Business.

Financial Assistance: LQ Exchange may offer financing to qualified Liquid Capital franchisees. LQ Exchange is under no obligation to offer financing to any Liquid Capital franchisee even if the franchisee is a Qualified Borrower. LQ Exchange’s decision to extend, or not to extend, an offer of financing will be made solely by LQ Exchange based on its then- current lending criteria. LQ Exchange will also make mezzanine financing available to certain qualified franchisees.

Training and Assistance: Before opening for business, the franchisee’s Controlling Principal, and any other employees the franchisee designates and Liquid Capital approve must have attended and satisfactorily completed the initial training program. Currently, training is conducted at the parent LCC’s headquarters in Toronto, Ontario, Canada. The initial training program is offered as needed during the year depending on the number of new Liquid Capital franchisees, the number of other personnel needing training, and the scheduled opening of new Liquid Capital Businesses. Initial training generally requires approximately five days. Liquid Capital may require the franchisee or the franchisee’s personnel to attend additional training programs and may charge a fee for training materials.

Territory: The Franchise Agreement will specify a territory within which the franchisee will operate their Liquid Capital Business. The actual size of the Territory will vary depending upon the availability of contiguous markets, the franchisor’s long range plans, the franchisee’s financial and operational resources, and market conditions.

Term of Agreement and Renewal: The length of the initial franchise term is 10 years. If a franchisee satisfies the preconditions of obtaining a Successor Franchise, the franchisor will offer the right to obtain an additional term of ten years.

Obligations and Restrictions: The operation of the Liquid Capital Business in the Territory must be directly supervised by a person with an ownership interest and whom the franchisee designates as their “Controlling Principal.” The franchisor must approve the Controlling Principal, and he or she must complete the required training, devote best efforts to the fulfillment of the franchisee’s obligations under the Franchise Agreement, and make operating the Liquid Capital Business his or her primary professional occupation. The franchisee may offer and sell only the products and services that Liquid Capital periodically specify.

Estimated Number of Units: 85

Investment Tables:
Initial Investment
Name of Fee Low High
Initial Franchise Fee $55,000 $55,000
Office Supplies $500 $1,000
Lease $0 $2,000
Furniture, Fixtures & Equipment $0 $12,000
Signage $0 $2,000
Computer Hardware & Software $500 $5,000
Insurance $1,000 $1,500
Initial Training $1,200 $3,000
Professional Services $1,500 $8,000
Additional Funds During the First Three Months of Operation $2,100 $3,000
Email Marketing/ Communicative Program $1,500 $1,500
On-Boarding Program $1,000 $3,000
Committed Capital $150,000 $150,000
Client Advances Varies
ESTIMATED TOTAL $214,300 $254,000
Other Fees
Type of Fee Amount
Continuing Royalty 8% of Gross Revenue.
Back Office Services Fee (Full Factoring) The greater of (i) a percentage (not to exceed 0.75%) of the accounts represented by the invoices listed on a schedule of accounts.
Back Office Service Fee (Purchase Finance Program) 0.35% of the amount purchase.
Asset Based Lending (ABL) Service Fee Between 0.35% and0.5% of the amount purchased.
Exchange Fee Currently, .25% of the accounts represented by the invoices listed on schedule of accounts and processed through LQ Exchange.
Originating Franchisee Fee Currently, 12% of the gross revenue earned by all Participants signing a Participation Agreement other than the Originating Franchisee.
Management Fee Maximum of 0.5% of the Accounts (as defined in the Franchise Agreement) represented by the schedule of accounts.
Marketing Fund Contribution $500 per month.
Cooperative Advertising Currently, none.
If a cooperative is established, as required by the cooperative documents.
Additional Training and Retraining Currently, none.
Annual Conference $1,000 - $3,000 per attendee.
Training for Additional or Replacement Personnel $500/day per person.
Transfer Fee 50% of our then-current Initial Franchise Fee plus our reasonable expenses.
Renewal Fee 50% of our then-current Initial Franchise Fee.
Supplier Approval Fee Our reasonable expenses.
Audit Fee Our expenses, including reasonable accounting and legal fees.
Insurance Fee Amount of all insurance payments we make on your behalf plus any associated out of pocket expenses.
Interim Management Fee 8% of Gross Revenues plus our out-of-pocket expenses.
Short-term Loan Expenses Interest (currently, the lesser of the maximum legal rate or 24 % per annum) and related transaction costs.
Interest The lesser of 24% per annum or the highest rate allowed by applicable law.
Insufficient Funds Charge Prevailing rate.
Indemnification Varies.
Enforcement Costs Our cost, including legal fees, to enforce the Franchise Agreement.

The above information has been taken from the FDD of Liquid Capital. Year of FDD: 2016

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