Highlights of AdviCoach’s Item 19 Financial Performance Representations (2013 FDD)
- The franchisee will offer business facilitation and support services to businesses in all stages, from inception to full implementation, in advertising, sales, marketing, customer service, leadership, team building, business planning, management, and organizational development, on a temporary basis.
- The total investment necessary to begin operation of an AdviCoach single unit franchise is between $66,000 and $77,050. This includes $55,000 that must be paid to the franchisor or its affiliate.
Explanatory Notes for Statement of Franchisee Annual Projected Revenues
- The following are statements of annual projected revenues and earnings for AdviCoach Franchised Businesses. These are not historical financial performance representations about the system’s existing outlets, or any subset of those outlets. They are a forecast of projected financial performance based on the factors stated below.
- The projection is based on industry factors, including the economic and market conditions of your operation, and includes franchisee sales based on the franchisor’s suggested minimum pricing, the cost of services, and operating expenses.
Pricing for Coaching Services
- AdviCoach franchisees offer business coaching services. The suggested minimum pricing for coaching services is $1,800 per month. The franchisor does not establish any mandatory pricing. You may charge what you choose, but this amount is reasonable based on industry averages and the experience of franchisees.
Length of Engagement
- The anticipated length of a coaching engagement with a client is twelve months. The franchisor does not establish any mandatory length for the coaching engagements and you may engage with a client for as long as you choose.
- This anticipated length is reasonable based on industry averages and the experience of its franchisees. The franchisor has, however, chosen to use nine months for this projection.
- The franchisor acknowledges that some new franchisees may require time to ramp up their businesses and gain the experience and confidence to negotiate twelve month contracts with their clients.
- Based on the franchisor’s suggested engagement fees and a nine month engagement, the revenue generated per client annually would be $16,200 ($1,800 x 9 months).
- Royalties. Royalties are paid on a sliding scale, as described in the FDD and Franchise Agreement. They range from 15% for up to $125,000 in gross revenues per calendar year to 5% for $325,000 and above in gross revenues per calendar year.
- Marketing. You pay $400 per month, as described in the FDD and Franchise Agreement. The franchisor expects that you will spend anywhere from 6% to 8% of gross revenues on local marketing efforts.
- Miscellaneous. Other expenses include equipment, professional services such as accounting and legal services, telephone, office supplies, insurance, and other expenses of operating a home-based business. The franchisor anticipates between $7,000 and $10,000 per year for these expenses.
- Based on the average monthly engagement fee, the length of engagement, the expenses (using approximately $10,000), and royalty and brand building fund fee, you must engage the specified number of clients to achieve the income levels in the chart below.
- In order to avoid having fractional clients, the franchisor has used the number of clients closest, but above, the desired income level.
- The franchisor has calculated that it requires 6 to 8 hours per month to service each client. This includes 3 hours of coaching sessions a month and 1 to 1.5 hours preparation time before and after the coaching sessions.
- Note that the franchisor does not recommend more than 3 coaching sessions per client in any one month period. Below the franchisor calculates the amount of time you should be prepared to spend each week to provide business coaching services to your clients.
- These calculations are based on 52 weeks and will vary depending on the amount of vacation days you take in any given year period.
- These expenses are based on the franchisor’s experience and knowledge of current economic conditions, and the expenses of running a home office. If a franchisee chooses to operate from an office location outside of the home, the projected expenses will be higher and the income will be reduced. The franchisor does not require any franchisee to operate from an office location outside the home.
- These projections assume that you will be the Principal Owner of the Franchised Business and that you do not receive an additional salary. They assume that you do not hire any other employees.