How the worksheet handles franchise funding
The worksheet starts with user-entered project uses rather than a sales target. Item 7 from the Franchise Disclosure Document can frame the franchisor's disclosed investment range, but the calculator does not use the FDD range as actual cost. Your rows drive the math.
The use rows cover initial franchise fee, buildout and leasehold improvements, equipment and fixtures, opening inventory, deposits and professional costs, pre-opening payroll, training and marketing, working-capital reserve, and other uses. The source rows cover ROBS plan-funded corporate equity, personal cash and other non-debt equity, plus either residual or explicit debt.
Why Item 7 stays separate
FTC franchise disclosures are designed to give prospective franchisees prescribed information before signing or paying. Item 7 estimates can be a useful starting point, but they are not a construction bid, lease budget, lender approval, working-capital plan, or guarantee of actual cost.[1][2]
Keeping Item 7 separate prevents a common mistake: treating the franchisor's disclosed range as the buyer's actual sources-and-uses statement. Site selection, landlord work, local permits, equipment packages, opening inventory, payroll timing, training travel, reserves, and financing terms can move the result materially.
What the ROBS and debt rows do not prove
In a ROBS transaction, retirement-plan assets move through a qualified plan and the plan purchases employer stock in a C corporation. The company receives corporate equity, and the plan holds employer stock. This is why the calculator labels the ROBS row as plan-funded corporate equity rather than personal cash.[5][6]
SBA describes 7(a) financing as loans made through lenders with an SBA guarantee, with uses that may include working capital, equipment, fixtures, supplies, changes of ownership and multiple purposes. Most 7(a) term loans are repaid from business cash flow. This calculator can model an amortizing payment, but it does not decide program eligibility, Franchise Directory status, equity injection acceptance, lender underwriting, collateral, guarantees, repayment ability, or franchise suitability.[3][4]
Formula and interpretation
Total project uses equal the sum of the eight user-entered use rows. Non-debt sources equal ROBS plan-funded corporate equity plus personal cash and other non-debt equity. In residual mode, modeled debt equals total project uses minus non-debt sources, floored at zero. In explicit mode, modeled debt equals the entered debt amount. The funding gap is total project uses minus all modeled sources.
Optional debt service uses the same fixed-rate amortizing formula used in the SBA debt-service calculator: payment per period equals principal times periodic rate divided by one minus one plus periodic rate raised to the negative number of payments. A zero-rate case divides principal by payments. DSCR, when supplied, is annual cash flow available divided by annual debt service.
Use the result as a diligence checklist
A balanced worksheet means sources equal uses under your entries. It does not mean the project is sufficiently capitalized, that the reserve is adequate, that a lender will accept every source, that ROBS is compliant, that the franchise is suitable, or that the business can afford debt service.
Before relying on the numbers, compare them with the current FDD, lease and buildout estimates, equipment quotes, lender term sheet, franchisor requirements, ROBS provider documentation, tax and legal advice, valuation support, payroll timing, insurance costs, and downside reserves.
Franchise funding calculator FAQ
Sources and verification
- FTC Franchise Rule Compliance Guide
FTC guidance explains Franchise Disclosure Document obligations and Item 7 estimated initial investment disclosures. Checked Aug. 13, 2026; FTC page access returned HTTP 403 in the reader tool, so this citation is used for the official source location and the page avoids quoting inaccessible text.
- FTC Franchise Rule, 16 CFR Part 436
The federal Franchise Rule governs required franchise disclosures, including prescribed disclosure-item structure. Checked Aug. 13, 2026.
- SBA 7(a) loans
SBA states that 7(a) loans are made through lenders with an SBA guarantee, may support working capital, equipment, changes of ownership, furniture, fixtures, supplies and multiple purposes, and are generally repaid with principal and interest from business cash flow. Checked Aug. 13, 2026; page modified July 27, 2026.
- SBA SOP 50 10
SBA describes SOP 50 10 as the loan-origination policies and procedures for 7(a) and 504 loans. The calculator does not apply SOP rules, lender equity injection tests, collateral, guaranty, affiliation, franchise, or eligibility determinations. Checked Aug. 13, 2026.
- IRS ROBS compliance project
IRS describes a ROBS as an arrangement where retirement funds are used for business start-up costs and the plan uses rollover assets to purchase stock of a new C corporation, while identifying valuation, filing, prohibited-transaction and business-failure concerns. Checked Aug. 13, 2026; page last reviewed Nov. 16, 2025.
- IRS ROBS guidelines memorandum
The IRS memorandum describes the typical ROBS sequence and states ROBS arrangements are not noncompliant per se but should be reviewed case by case. Checked Aug. 13, 2026; memorandum dated Oct. 1, 2008.
Compare the debt line separately
If your only question is debt payment, use the SBA debt-service calculator. If your question is ROBS, cash, other equity and SBA debt together, use the ROBS and SBA funding-mix calculator.