Gerald M. Kagan is taking pawnshops out of seedy city storefronts and bringing them to suburban shopping centers. He and his partner, Daniel M. Naygrow, are franchising Kagan's lucrative family business, Western Loan & Jewelry Co., a 60-year-old hock ship in Sacramento. In the process, they hope to transform pawnbrokers into legitimate members of the financial services industry.

The partners' pitch is that the new company, called Western Collateral Loan Group, will provide loans to people who have neither the time nor the credit rating to obtain a bank loan. Since first advertising the operation last August, WCLG has gotten 300 inquiries on the venture. But only one franchise -- in well-heeled Newport Beach, Calif., no less -- has resulted from the flood of calls. "Everybody thinks it's a marvelous idea," says Kaga, "but nobody wants to lower themselves to get involved."

Those not deterred by such considerations can acquire a WCLG franchise for a minimum of $150,000-$50,000 for the license, the shop, and a two-week training program; and at least $100,000 in available cash for loans. All franchises will be linked by a central computer, which will provide data on the going price of commonly pawned items -- jewelry, musical instruments, and the like.

"We're in the business of selling money, so we can't lose," says Kaga. "Everyone needs money. It's as basic as food."