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Franchising: Pathway to Wealth Creation by Sue Birley, Robert M. Rosenberg, Stephen Spinelli,

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Chapter 8. Financial Analysis

The purpose of this chapter is to show you the links between transactions and their financial ramifications. Every transaction embodies revenue, cost, investment—or all three. How do all of these transactions come together into a system that creates wealth? This chapter answers that question.

The proof of a successful SDS lies first in its ability to generate profit and second in its ability to be precisely duplicated. All too often, success is measured only in terms of revenue without considering profitability or the possibility and effects of growth. Although necessary, revenue is not alone sufficient to measure a franchise’s unit economics.

Each transaction in our Chapter 7 discussion of transaction analysis is associated ...

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