Starting a Franchise - Financial Modeling - Scaling Into 12 Locations

This model is hyper-focused on giving the prospective franchise owner the ability to plan out the cash flow needs of scaling into 12 locations. On a granular level, you will be able to plan the month each franchise agreement is signed, the month development starts, and the month revenue starts.



Pricing
You will be sent the template after purchase.

The main purpose of this exercise is to figure out how much cash you will need in order to fully scale out your franchise opportunity while accounting for the length of time needed to develop each location, debt service, and revenues.

The model goes out for a period of up to 10 years and shows all details of the pro forma on a monthly and annual basis. Much of the monthly detail is a matrix for each location as this model allows the user to see what happens when you start each franchise unit over time.

Inputs include:
  • Month Franchise Agreement Signed
  • Initial Franchise Fee
  • Cost to Develop Unit
  • Occupancy Cost i.e. rent
  • Start month of occupancy cost
  • Daily $ of sales
  • Avg. ticket price
  • Annual growth of revenue per unit
  • Stabilization month (when growth plateaus)
  • Variable costs: COGS (cost of goods sold), marketing, repairs, supplies, bank/cc fees, royalty fee.
  • Development start month (goes off the month the agreement was signed for a given unit)
  • Opening month (goes off month agreement was signed as well)
  • Two 'other fixed costs' with their own start months.
  • Assumptions for manager salary, asst. manager, and other hourly workers with a headcount variable for all.
  • Amount of debt vs. equity for each unit development.
  • Interest-only loan
  • P+i loan after 12 months

Based on all of the above, you will see the exact expected cash flow needs over time as well as a running cash position. This will make it easier to know how much equity you will have to provide upfront vs. how much can come from future operations of your earlier units.

Everything is as dynamic as possible and you can do all kinds of strategic cash flow planning that most models will not have accounted for. If you are planning on investing in a franchise where you scale up the number of units over time, this model is definitely a good place to start testing things to get an idea of the financial side of your endeavor.


A 'returns' tab is included, which shows IRR and ROI over the 10 years as well as a visual chart thta displays annual cash flow.

You can plan for less than 12 units, but not more. If you wanted to add more units to account for, that is possible but it would take some customization time, for which I bill at my hourly rate.

Please be aware this is not financial advice and I am not a financial advisor. This is just a model to test your own assumptions with. Use it at your own risk.