Franchise Business Economics: Unit Economics, Royalties & Multi-Unit Growth
Run the numbers on a franchise like an investor: initial investment, royalties and ad fund, four-wall EBITDA, cash-on-cash, payback, franchised vs company-owned, the franchisor's revenue model, a multi-unit rollout and two offers compared by NPV and IRR – 8 labs, every cell checked instantly.
The first lesson is free — no account needed.
About this course
A franchise economics course that runs the numbers on one fictional fast-casual restaurant brand the way an investor would, for prospective franchisees, franchise consultants and business students. You add up the initial investment in a low and a high case and size the bank loan, build the unit P&L with royalty and ad-fund fees on net sales, calculate four-wall EBITDA and the cash-on-cash return on your own money, find the payback month and the deepest point of a 36-month cumulative cash curve, switch to the brand's side to compare a company-owned with a franchised unit, model five years of franchisor revenue from initial fees, royalties and technology fees, plan an 8-unit development agreement with a ramp-up and compare two fictional franchise offers by NPV and IRR over ten years. The first lab is free.
Lessons
- The Initial Investment: Low and High EstimatesFree
- The Unit P&L: Royalty and Ad-Fund Fees Pro
- Four-Wall EBITDA and Cash-on-Cash Return Pro
- Payback Period from Monthly Cash Flows Pro
- Franchised vs Company-Owned: the Brand's View Pro
- The Franchisor's Revenue Model: Fees and Royalties Pro
- Multi-Unit Rollout: Openings, Ramp-up and Cumulative Units Pro
- Comparing Two Franchise Offers with NPV and IRR Pro