The Escape & Empower Franchise Podcast | Buying Your First Franchise

Think You Can Buy a Franchise? Let’s Talk Numbers

Dave Greenberg and Pete Gilfillan Season 1 Episode 11

Escape and Empower Podcast with David Greenberg and Peter Gilfillan

One of the biggest questions aspiring franchise owners ask is: How much money do I need to invest in a franchise? In this episode, Dave and Pete break down the key financial factors every franchise candidate needs to understand—liquid capital, total investment, working capital, and net worth requirements—so you can confidently determine what’s realistic for your financial situation.

In this episode, Dave and Pete discuss:

  • Understanding Liquid Capital and Total Investment

Pete explains the difference between liquid capital (cash, stocks, bonds, and other accessible funds) and total investment (everything required to get your business up and running). Dave shares how he leveraged his retirement savings through the ROBS program to fund his franchise.

  • Service-Based vs. Facility-Based Franchise Investments

Not all franchises require the same financial commitment. Pete and Dave break down:

  1. Service-Based Franchises: Typically require $75K+ in liquid capital, with total investments starting at $100K+.
  2. Facility-Based Franchises: Require $100K+ in liquid capital, with total investments exceeding $200K+ due to build-out costs.
  • The Role of Working Capital and Growth Planning

A common mistake is undercapitalizing. Dave and Pete emphasize the importance of planning months of fixed expenses upfront and having additional funds to reinvest in growth.

  • Financing Options and Partnership Risks

Franchise ownership doesn’t always require upfront payment in full. Pete discusses leveraging SBA loans, ROBS programs, and other financing options. Dave warns against rushing into partnerships, emphasizing the need for a clear exit strategy to avoid conflicts down the road.

Key Takeaways:

  • Know Your Numbers: Understanding liquid capital, total investment, and working capital is crucial.
  • Plan for Growth: Scaling a franchise requires smart financial planning—don’t just focus on getting started.
  • Service-Based vs. Facility-Based: Choose a model that aligns with your financial situation and risk tolerance.
  • Be Wary of Partnerships: They seem appealing but can turn into a business divorce if not structured correctly.

"People talk about risk. How much risk is there? Well, this is a time when you look in the mirror. Risk is really about how hard you're going to work. But if you can't capitalize properly, you're just increasing your risk—and you should think twice." — Pete Gilfillan

CONNECT WITH PETER GILFILLAN:

Website: https://www.hireyourself.com/
LinkedIn:https://www.linkedin.com/in/petegilfillan/

CONNECT WITH DAVID GREENBERG:

Website: https://empoweredfranchisee.com/
LinkedIn:https://www.linkedin.com/in/dave-greenberg-entrepreneur/