Et tu MauMau?

Using retirement funds to buy franchises and even buy your home is the latest rage. Basically, it is some variant on setting up a "company" and then buying "stock" in the company. So just as your retirement account can buy Exxon or Microsoft, it can buy "Mom's Pizza" stock.

Leaving aside the legalities (and I really don't think it is quite as settled a matter as Mr. MauMau would have us believe), the idea of putting all your retirement money in a business (franchised or otherwise) is incredibly risky. Apart from the obvious risk, having your retirement money sunk into the business can skew your decision-making.

I have a situation right now where there are 2 partners. The site is losing money every month, and one partner wants to sell and eat the current debt. The other partner cashed in her 401k and so she won't sell since it would mean confronting the fact that she will retire destitute. Very sad.

Please... if your credit is that bad and you can't find a lender to finance your franchise, wait a bit and try again. That "once in a lifetime" franchise opportunity will still be there.