Franchise Acquisition Financial Model

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by a searcher from United States Air Force Academy
in Austin, TX, USA

8mos ago

Franchise Acquisition Financial Model

I'm looking at a multi-unit existing franchise acquisition. I have a great (non-franchise) financial model spreadsheet that works well, but the franchise business model has some significant differences. Does anybody have a multi-unit franchise financial model spreadsheet that they like and would be willing to share? Thank you.

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reply by a searcher 6mos ago
from United States Air Force Academy in Austin, TX, USA

I posted this about a month ago and I didn't get any replies so I started looking other places to get my answer. I found a few things that might be helpful to others who are interested in franchise resales, so read on if that's you. First, I found that you don’t really need a franchise-specific financial model. A “normal” (aka non-franchise) financial model works fine for a franchise. I thought that there would need to be a separate section for royalties or other fees that the franchisor requires. However, most franchisees just keep those as a line item in their operating expenses. If you are thinking about buying a new franchise then I would recommend subscribing to redacted ($80/month). They have free models you can download that do a good job of accounting for the ramp-up costs and other things more like a startup than an acquisition. Vetted Biz also has some pretty good proprietary-ish data on how much franchisees make and other things like that. Second, there are going to be costs to transition from the current franchisee owner to you. Probably the biggest of these is the transfer fee. This can be either a fixed amount per territory or a percentage of the purchase price – for one multi-unit that I’m looking at, it will be in the $60-80k range. Also, my understanding is that when you sign a new franchise agreement with the franchisor, you will be bound by the most recent Franchise Disclosure Document (FDD), which may be different than the one the seller was using. There could be a change in royalties, fees, etc. You will need to figure those out and model those in your financial model. Third, if you’re looking at franchise resales then you probably already have some of these helpful websites but, if not, then here you go: Free FDDs: redacted Franchise Flippers: redacted Wesellrestaurants: redacted Another link to Vetted Biz: redacted

reply by a searcher 4mos ago
from University of Pennsylvania in Palo Alto, CA, USA

Bought my first franchise as part of ETA in March '25. In process of expanding to more locations. Agreed you shouldn't need a "franchise-specific" financial model -- your model for other acquisitions should work fine.