Funny Money

Franchise Fee: $8,300
Initial Inventory: $20,000
Uniforms: $300
The Satisfaction Of Being Your Own Boss: priceless
For everything else, there's MasterCard. Not to mention American Express, Discover, Visa and a slew of other credit cards. Take it from Bernie Mexicotte, former vice president of what is now Bank One. En route to buying a Luxury Bath Systems franchise in Flint, Michigan, Mexicotte slammed right into a financing roadblock. His money was tied up in two other businesses, and despite his excellent credit, lenders were unwilling to grant him a loan to invest in a then-unknown franchise concept. He was even rejected by the bank he'd worked at for 21 years.

Drawing on the power of plastic, Mexicotte racked up $75,000 in cash advances and charges. In all, he used 27 credit cards to cover start-up costs and eight months of operating expenses.

Detoured by similar roadblocks, many franchisees map out alternate avenues to financing—some on their own, some with counsel, but rarely with quite as much risk as Mexicotte. Let's meet some of the more creative treasure hunters:

• Todd Recknagel, 37, founder and managing partner of a mezzanine banking firm. Recknagel enlisted support from four wealthy investors who guaranteed the bank would be repaid its $500,000 loan for a five-unit Blimpie International Inc. franchise in western Michigan.

• Tom Stringer, a 39-year-old chemical engineer with Kimberly-Clark. Stringer was a clueless prospective franchisee with fledgling franchisor Computer Doctor until a consulting firm groomed and guided him toward a $115,000 loan to open his Indianapolis franchise.

• Jo Ann Foley, a laid-off machinist. With the help of a college counselor, the 49-year-old and her husband, Robert, 56, got a bank that had already turned them down to finance their $27,000 Curves for Women franchise in Galax, Virginia.

• Mark Teears, 39, a project manager for a software developing company in Southern Maryland. Teears was rejected by bank after bank-not to mention venture capitalists—on his bid for $60,000 to open a The Cleaning Authority franchise in Raleigh, North Carolina. Thanks to a helpful trio (a consultant, an existing The Cleaning Authority franchisee and a sympathetic banker), Teears broke through his financing roadblocks.

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Paul DeCeglie, a freelance business writer in Los Angeles, is a former reporter for American Banker and Journal of Commerce.

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