Most franchise models look clean on paper.
The first year rarely does.
I review the numbers before you sign, so you know how much cash you really need and what happens if the business grows slower than promised.
Fixed fee. No commissions.
✔ Find out if your startup budget is realistic
✔ See how long your cash lasts if sales start slow
✔ Get a clear answer: move forward, change the deal, or walk away
Built for service-based franchise buyers committing meaningful capital.
Capital & Runway​
How much total cash is required to reach cash-flow break-even, including debt service — and whether your stated capital is actually enough to get there.
Ramp & Break-even​
What happens if revenue takes 30, 60, or 90 days longer than projected. Most models assume clean ramps. Real operations rarely deliver them.
Fees + Debt Load ​​​
How royalty fees, marketing fees, and loan payments stack against early-stage revenue — and whether the fixed cost structure is survivable during a slow start.
Where Capital Risk Usually Shows Up
What a Review Can Find
Illustrative example. The numbers are hypothetical, but the pattern is common.
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A buyer is evaluating a service-based franchise. The FDD lists a maximum total investment of $400,000. A review built on real bids and a realistic first year finds:
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Total project cost: $480,000, 20% above the FDD maximum
Working capital needed: $80,000. The FDD range is $20,000 to $30,000.
Labor in year one: about 30% of revenue. The FDD's figure, based on mature stores, is 20%.
Cash flow over the first 3 years: negative
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Recommendation: Do Not Proceed under the current capital plan.
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The lesson: finding this before signing costs a Financial Risk Review, starting at $2,950. Finding it after signing can cost far more.
Why Independent Analysis Matters
Many franchise buyers rely primarily on information provided by the franchisor or broker.
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That’s normal. But those parties are not economically neutral.
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Lenders have a different focus as well. Their job is to evaluate loan repayment — not long-term investment quality.
We are not affiliated with franchisors.
We do not earn commissions or referral fees.
We are not compensated based on whether you move forward.
Our role is simple: to evaluate risk using disciplined, conservative assumptions — and help you make a clear, defensible decision before capital is committed.​​
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The earlier risk is identified, the less expensive it is to correct.
What You Receive
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A disciplined diligence process that confirms the right inputs before analysis begins
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A structured Due Diligence Review: franchisor questions, franchisee validation plan, and identification of information gaps that materially impact risk
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A conservative financial risk review (when warranted): base-case and downside scenarios built on defensible assumptions
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Clear visibility into break-even timing, cash burn, and total capital required—including cash-flow break-even after debt service
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A written summary of findings and a plain-language recommendation you can defend
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The goal isn’t complexity.
The goal is clarity.​​
How The Process Works
A disciplined, step-by-step review before capital is committed.
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Step 1 – Strategy Call (30 Minutes)
We start with a focused 30-minute conversation to understand the decision you’re evaluating and the capital at risk.
If independent analysis isn’t the right next step, we’ll say so.
No pressure. No obligation.
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Step 2 – Due Diligence Review (Information & Validation)
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Before building a model, we confirm you have the right information—and identify what’s missing.
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This step is designed to prevent decisions from being made on incomplete inputs or curated narratives.
We provide:​
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A structured franchisor question set (must-answer items + what “good” looks like)
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A franchisee validation plan (top, average, and lower-performing operators)
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Identification of information gaps, unsupported assumptions, and the specific questions needed to close them
This step often surfaces risks buyers didn’t realize were still unresolved.
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Step 3 – Financial Risk Review
This is where the numbers are pressure-tested.
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We evaluate the opportunity using conservative, real-world performance assumptions.
We do not rely on best-case projections.
We model:​
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A defensible base case
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A realistic downside case (slower ramp, tighter margins, higher labor, higher fixed costs, debt sensitivity)
We focus on decision-relevant downside—how the deal holds up under stress, not how upside is pitched.
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Step 4 – Final Recommendation
You receive a clear, plain-language recommendation:
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Proceed
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Proceed with Changes
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Do Not Proceed
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We explain the reasoning—including the assumptions that matter most—so the decision is disciplined and defensible.
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Step 5 – Decision Support (Optional)
Some clients choose limited follow-up support to apply the findings as they move toward a final decision.
This may include:​
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Preparing for lender or SBA conversations
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Translating the analysis for partners or family stakeholders
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Refining assumptions as new information becomes available
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Evaluating whether changes materially improve the risk profile
No retainers.
No ongoing advisory obligations.
The goal is not to justify a deal.
The goal is to reach the right decision with clarity.
Engagement Structure
Two fixed-fee services. No retainers. No commissions. Scope confirmed after the Strategy Call.
Due Diligence Review | Starting at $1,500
Franchisor question set, franchisee validation plan, information gap analysis.
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Financial Risk Review | Starting at $2,950
Base case + downside model, break-even analysis, written recommendation.
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The Due Diligence Review fits if you're still vetting a concept and the franchisor behind it. The Financial Risk Review fits once you've narrowed to one concept and want to know whether your capital plan can survive the ramp to break-even. Not sure which you need? We'll figure it out on the Strategy Call.
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The cost of disciplined analysis is small compared to the cost of getting the decision wrong.
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Who This Is / Isn't For
Who This Is For
This advisory is for investors who:
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Are evaluating a significant capital commitment ($300K+).
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Want an independent second opinion before committing capital.
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Are using or considering SBA or debt financing.
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Prefer disciplined analysis over optimistic projections.
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View risk analysis as protection — not an expense.
Who This Is Not For
This may not be the right fit if you:
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Have already decided to move forward regardless
of what the numbers show.
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Are looking for validation rather than evaluation.
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Prefer best-case projections over realistic assumptions.
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Are seeking informal advice rather than a disciplined evaluation of the numbers.
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Are looking for ongoing operational consulting or franchise coaching.
About Scott Lyons
Scott Lyons
Founder
Franchise Capital Risk Advisory
I've spent more than 30 years in the fitness industry. As a franchise operating partner, I grew a Planet Fitness portfolio from 4 to 10 locations. Later, as a Regional Director, I oversaw more than 50 clubs across multiple markets.
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That work taught me what new locations actually cost, how long they take to reach break-even, and where the cash runs short.
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Next, I went through the same process you're in now. I spent more than a year evaluating multiple franchise concepts. What I found was a gap: buyers get plenty of help choosing a franchise, but almost no one independent checks whether the numbers actually work before they sign.
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That's why FCRA exists.
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I'm not a broker or a franchise consultant. I don't earn commissions or referral fees, and I'm paid the same whether you buy or walk away. My job is to tell you whether the numbers hold up.