Financial Models

This is a development and operating model for the startup of up to 12 franchise locations that are scaled into over time. The model displays up to 10 years worth of time and detail on a monthly and annual level.

The specific logic for operating a franchise that is often different than just normal development and operations of storefront locations is the fact that there is usually a franchise fee (startup fee and on-going percentage) as well as a potential marketing fee. Also, the timing of things from signed agreement to construction and opening have unique timing delays that need to be accounted for. This financial model will handle all of that elegantly. For each location, it can be structured with its own development costs and the amount financed vs. equity contribution. If the franchise is being leased, then an occupancy cost can be input. Most of the operating costs are defined based on a percentage of revenue. Labor wages and salaried employees have their own schedule that defines on-going payroll costs over time. Expected sales revenue is based on average ticket price / sales per year / and percentage growth of sales per year until a defined stabilization period. The 10-year pro forma gives a nice overview of the aggregate cash requirements and cash distributions available from development and operations per year. The final IRR and ROI are shown as well as.