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Course 174 · Money course 45

Evaluate a Franchise or Business Purchase

Produce a fictional purchase due-diligence file with disclosure questions, normalized earnings, owner labor, recurring fees, financing stress and a proceed/revise/stop decision. Use complete original records and independently checked changed-input practice.

Before you start

Recommended preparation: Read Business Financial Statements.

Read Business Financial Statements See everything you’ll need

Free download · Original practice data · No external account required. Download the starter pack

What you’ll leave with

A fictional purchase due-diligence file with disclosure questions, normalized earnings, owner labor, recurring fees, financing stress and a proceed/revise/stop decision.

Start course Start without an account. Sign in to save lesson progress across devices.

Your project

Start with the practice files. Build your project one lesson at a time.

Practice files are free without an account. Sign in to save your project record in My Proof: a description, checklist, and optional work link. Keep the original files in your own app or notebook; saving a project record does not upload them.

  1. Get your materialsDownload practice filesSupplied practice cases, a blank working record, complete lesson instructions, and annotated worked examples.
  2. Make your projectView the project checklist Work in your own notebook, document, or software. Use the supplied practice examples when you prefer.
  3. Keep a private recordSave a project record Sign in to save a description and checklist, then return to update them.
Course handbook

Know the route before you begin.

Here’s what you’ll need and what you’ll make. You can return to this guide during any lesson.

Who this is for

Learners ages 14+ and adults studying future or current business decisions through fictional cases; no financial transaction is required.

Prepare before lesson one
  • Recommended preparation: Read Business Financial Statements.
  • Use paper or a local spreadsheet and calculator. Supplied records contain no real identities or accounts.
  • Preserve original financial files in your own tool; My Proof stores a project description, checklist and optional work link.
Your final project

Finish with proof you can use.

A fictional purchase due-diligence file with disclosure questions, normalized earnings, owner labor, recurring fees, financing stress and a proceed/revise/stop decision.

Save a project record in My Proof
See project checklist and review criteria

Keep your working files in your own notebook or software. Save a private description, checklist, and work link in My Proof.

What to include

  • An acquisition-scope and price-component exception file.
  • A claim-definition, sample and selection-audit worksheet.
  • A reported-to-normalized-to-owner-adjusted profit bridge.
  • A recurring-fee and contract-control reconciliation.
  • An operating-to-cash coverage bridge and downside financing stress.
  • A conditional acquisition due-diligence brief with decision gates.

Review and revise

Use these criteria to check your work and choose what to improve.

  • Scope: price/rights gaps are explicit.
  • Claims: sample/owner labor/normalization are checked.
  • Finance: fees and debt/reserve/downside bridges reconcile.
  • Decision: supported conditions and qualified review remain visible.
Three ideas to help you along the way
Three useful ideas

The rules behind the steps.

01

Match the rights package

Price is not proof that permissions transfer.

02

Price the owner work

Reported earnings can omit labor and future fees.

03

Test adverse cases

Brand appeal does not guarantee coverage.

What do these words mean?
Key words

Key terms worth knowing.

Due diligence
Source-based verification of rights, claims, costs and obligations.
Addback
Supported removal of a nonrecurring cost from normalized performance.
Owner-adjusted profit
Modeled earnings after explicit replacement labor cost.
Royalty base
Defined amount to which contract percentage applies.
Cash buffer
Modeled operating result less specified debt/capital cash needs.
Your route

6 lessons.
One useful project.

Work in order the first time. Each lesson makes something the next lesson can use.

  1. 1
    Up next

    Identify what is actually for sale

    Separate price components from rights, obligations and additional startup funding.

  2. 2
    16 min

    Audit earnings claims

    Check definitions, full sample and selection limits behind an earnings pitch.

  3. 3
    16 min

    Calculate owner-adjusted profit

    Normalize documented one-off cost and price unpaid owner work without claiming market valuation.

  4. 4
    14 min

    Price recurring fees and restrictions

    Apply gross-based royalty/adfund and separate contract restrictions from support promises.

  5. 5
    19 min

    Stress-test debt and transition

    Reconcile operating profit with debt service/reserve and test downside cash coverage.

  6. 6
    19 min

    Write a conditional due-diligence brief

    Compile claim, rights, cost and cash stress evidence into a proceed/revise/stop decision without spending.

Use the tools

Tools to help you practice.

See all tools
ZIP · practice files

Evaluate a Franchise or Business Purchase practice files

Supplied practice cases, a blank working record, complete lesson instructions, and annotated worked examples.

Text worksheet

Your course project worksheet

A downloadable text worksheet with each lesson’s working output, space for your answers, and the shared final-project checklist. Save your own copy.

Source transparency

Sources and further study.

Explore the references behind the lessons and take your learning further. Source notes explain access and reuse.

SBA: Buying a business or franchise
Source & access notes · checked 2026-10-01

Read actual redirected acquisition section on differing rights/control, full landscape and due diligence. Course uses current FTC terminology FDD rather than older source UFOC terminology.

Access: Public primary page body opened and relevant sections read through the web reader on 2026-10-01; no account required for reading.

Reuse: Original Life Starter cases, datasets and questions; no source exercise or worked dataset reproduced. Links support further reading.

FTC: A Consumer’s Guide to Buying a Franchise
Source & access notes · checked 2026-10-01

Read costs, continuing royalties, controls, disclosures and earnings evaluation. Original proposed acquisition is entirely fictional.

Access: Public primary page body opened and relevant sections read through the web reader on 2026-10-01; no account required for reading.

Reuse: Original Life Starter cases, datasets and questions; no source exercise or worked dataset reproduced. Links support further reading.

FTC: Franchise fundamentals and myths
Source & access notes · checked 2026-10-01

Read owner effort, contractual control and no guaranteed success; not a recommendation to invest.

Access: Public primary page body opened and relevant sections read through the web reader on 2026-10-01; no account required for reading.

Reuse: Original Life Starter cases, datasets and questions; no source exercise or worked dataset reproduced. Links support further reading.

Ready when you are

Start with the first useful move.

You’ll always know what to do, what to make, and where to go next.

Start lesson one