So, you’ve made the decision that you want to become a franchise owner. You’ve read the pros and cons and are eager to get started. But now you have a lot of research and decision-making ahead of you. This can feel overwhelming. Fortunately, a Franchise Life Plan can help you figure things out.
What is a Franchise Life Plan?
A Franchise Life Plan is a tool that allows you to simplify the process of buying a franchise business. The word, “life,” in this case, is an acronym that stands for:
- Liabilities
- Income
- Financial wealth
- Equity
The Franchise Life Plan includes a workbook that helps you estimate both the startup costs of the business as well as the long-term ROI for a five- and ten-year period. These tools are perfect to inform your decision-making around competing franchise investments. It’s an exercise that forces you to look clearly at the pros and cons of each franchise you’re considering.
The good news is that franchise opportunities have a lot of data that you can track with this tool. For example, one of the benefits of a franchise business over a startup is that you will have a good sense of the common startup costs and even some of the surprise overhead expenditures that may plague your new company. This will give you the information you need to understand realistically what cash on hand and/or credit you’ll need to begin your franchise.
‘Know Before You Go’
Franchises like Gecko encourage you to talk candidly with current franchise owners to hear straight from the “horse’s mouth” exactly what to expect. Should you set aside living expenses as the franchise launches? What are the most common surprises from leasing a new space? Realistically, how much working capital should you have? Franchise owners can provide these details which can be recorded on the Franchise Life Plan. Then, you can sit down and not only have the details you need to plan a realistic financial picture of what to expect—but also if you’re comparing two different types of businesses, which one will launch with the lowest costs for the greatest return.
A good Franchise Life Plan will have a number of spreadsheet elements. It’s your job to simply fill in the blanks and then analyze the numbers. Franchise Business Review has a free spreadsheet you can download. It includes:
- A five-year income statement that allows you to project business growth in the early stages to the first big five-year milestone.
- The expenses you can expect in three primary cost centers: People, marketing, and operations.
- If you end up purchasing a 10-year franchise agreement, there is even a 10-year projection plan included in the Franchise Business Review Franchise Life Plan.
The Franchise Life Plan is a great decision-making tool that allows you to carefully determine the final numbers related to your new business venture. Gecko Hospitality offers business owners like you a lucrative opportunity to franchise your hospitality recruiting company. We provide you with proven tools and models, along with all of the information you’ll need to make an informed decision about your franchise investment. You can contact us to discuss how we can help you live an entrepreneurial life by calling us at 239-690-7006.
