The costs of owning a business coaching franchise

If you’re considering investing in a business coaching franchise, it’s important to understand the costs involved beyond just the initial investment. Julie Wagstaff, Managing Director of ActionCOACH UK, shares the costs involved with owning a business coaching franchise and how you can tell whether you’ll get value for money.

1. Royalty fees

Most franchisors require franchise partners to pay an ongoing royalty fee, typically a percentage of gross revenue. This fee covers ongoing support, updates, and use of the franchisor’s systems and materials. Additionally, some franchise partners are also required to contribute to marketing and advertising funds. These funds are used to promote the brand and generate leads for the franchise partners whether at national or local level.

Value Tip: When evaluating franchise opportunities, look for a franchise that offers excellent support and resources in exchange for the royalty and marketing fees. Investigate the effectiveness of the marketing strategies used and ensure that you’re getting good value from these fees in terms of leads and increased brand awareness.

2. Location & setup costs

Depending on the model, you may need a physical location to conduct coaching sessions or workshops. This means you’ll need to consider rent or mortgage costs, utilities, and any necessary renovations.

Value Tip: Look for a franchise that offers flexibility in location requirements, such as virtual coaching or home-based offices, to minimize overheads.

3. Insurance & legal fees

As a business owner, you’ll need to have insurance coverage for your coaching firm, including professional liability insurance. Additionally, you’ll incur legal fees for reviewing and negotiating your franchise agreement and any other contracts.

Value Tip: Consult with a franchise solicitor to ensure you’re getting a fair deal on your franchise agreement, and shop around for the best insurance rates to provide adequate coverage.

4. Working capital

You’ll need working capital to cover operational expenses, such as employee salaries, marketing and supplies until your franchise becomes profitable.

Value Tip: Develop a realistic financial projection and break-even analysis to determine how much working capital you’ll need and how long it will take for your franchise to become profitable. At ActionCOACH we work on this business plan with you.

5. Ongoing Professional Development

The last in my list of tips but the most important of all in our opinion at ActionCOACH. To stay competitive in the coaching industry, you’ll need to invest in ongoing professional development, including seeking out world expert advice, practical workshops and conferences with like-minded professionals. 

Value Tip: Choose a franchise that emphasises professional development and offers resources for continuing education.

Understanding the costs associated with owning a business coaching franchise is crucial for potential franchise partners. By evaluating the value you receive from each expense, you can make informed decisions and set yourself up for success in the coaching industry.

If you’d like to find out more about ActionCOACH in particular, view their profile here >>