Hey landlords - this is really a real business, for real

I just had the gazillionth landlord ask me for a personal guarantee for one of my franchise concepts, this time for NAKEDPizza - and yes, that's the official tally.

This baffles me. I raised almost $2.5M before launching the Third Slice business, have been doing this much longer than most area developers who knock on the door, am building out a (game-changing) concept backed by the Krafts, and am not asking for a dollar of investment from this particular landlord. Plus, by now they should know that any retail operator who offers a personal guarantee by definition either (a) doesn't know what he's doing or (b) is treating the franchise deal as a part-time or absentee job. Either way, it's a sure sign that the business itself either has insufficient capital or won't be well-managed.

It happens all the time for my Five Guys business too -- and that one's cranking out cash.

One reason I needed to raise so much money for Third Slice is that I know already that bank debt will be unattainable for at least 2 years, and probably longer. What's crazy about this is that if I invest (say) $150,000 in leasehold improvements to jumpstart the business, I can't get that financed. But if I build a $500,000 building I can probably get that financed, even if the tenant paying the rent is the same business (mine) that was deemed unworthy in the first place.

I've emailed with a few so-called franchising finance "experts" who tell me, not surprisingly, that the solution to my problem is to get an SBA loan by offering a personal guarantee. Then they helpfully offer to create a paid consulting relationship where such advice ceases to be free. Sigh.

It just goes to show that raising the visibility of franchising as a legitimate form of entrepreneurship is going to be a very long putt. Sort of like doing push-ups at age 80.