How do I find out what business coaching franchisees really earn?

Earnings claims are the part of a franchise pitch that sticks in the mind. They can also be the hardest to test. A coaching franchise is a service business, and one person’s income can look very different from another’s depending on hours worked, market and experience. Here is a practical way to check what you are told.

Get the claim in writing

If a franchisor or a seller talks about what units earn, ask for it on paper. Ask what group of franchisees it describes, over what period, and whether it counts only the strongest units. Ask what costs have been taken out. A figure with no description of who it covers and what it includes cannot be compared with anything.

Ask franchisees the plain questions

Call current and former franchisees, not only the ones on the franchisor’s reference list. Ask how many active clients they have, how many stay from year to year, how long it took before the work covered their costs, and how many hours they put in each week. Ask how much of their income comes from their own coaching rather than from a team or a program.

Separate the owner’s labour from the business

In many coaching units, the owner is the main source of billable work. That means the income is partly a wage. If you stopped coaching for a month, would the unit still earn? Ask the same of a resale seller. Then ask your accountant to read the statements and tell you what is left after a fair wage for the person doing the work.

Our page on what buyers look for when a business depends on one person explains why this matters, and what you own when you buy a franchise covers the wider picture.