Franchise Glossary
Pro Forma
What is Pro Forma in franchising?
A set of projected financial statements, typically showing estimated revenue, expenses, and profit, for a franchise location that has not opened yet. Franchisors or lenders may provide pro formas to help you model what your business could look like financially over its first one to three years. Pro formas are educated estimates, not guarantees. They are useful for planning your cash needs and loan applications, but stress-test the assumptions by comparing them against what existing franchisees report during validation calls and against Item 19 data in the FDD.