Franchise Business Economics: Unit Economics, Royalties & Multi-Unit Growth

What you'll build

What you will be able to do

Each lab ends with a concrete result that you build yourself and the checker confirms, cell by cell.

• Add up what it costs to open a Bramblewood Bowls restaurant in a low and a high case, size the bank loan and work out how much of your own cash the high case needs.
• Build the annual P&L of one Bramblewood Bowls restaurant, charge the royalty and the ad fund on net sales and see what all franchise fees cost as a share of sales.
• Calculate the four-wall EBITDA of a mature restaurant, the yearly loan payments and the cash-on-cash return on the money you put in.
• Build the cumulative cash curve of your restaurant over 36 months, find the payback month and the deepest point of the curve, and compare it with a naive payback estimate.
• Switch sides and look at one restaurant from Bramblewood's point of view: profit and return on capital if the brand runs it itself or lets a franchisee run it.
• Model five years of Bramblewood's franchise revenue – one-off initial fees, royalties and technology fees – as the system grows from 6 to 70 units.
• Plan an 8-unit development agreement over five years: count units by stage, apply the ramp-up to EBITDA and chart how the portfolio matures.
• Compare two fictional franchise offers over ten years: cash margin after fees, NPV at your required return and IRR – and see why the two measures can disagree.