Enough to keep the business and you going until it pays its way. Depending on the brand, that can take a few months or more than a year. Working capital is part of the investment, and lenders expect to see it in your plan.
What working capital covers
- wages, rent and bills before income catches up
- the franchisor's ongoing fees. See What ongoing fees will I pay a franchisor?.
- stock and supplies as you grow
- customers who pay you late
- your own living costs, if the business can't pay you a salary yet
How to work it out
- Build a month-by-month cash flow forecast for at least your first year.
- Find the lowest point of cash in it.
- Add a buffer for things taking longer than planned.
Ask the franchisor, and existing franchisees, how long a typical unit takes to break even.
Can it be funded?
Often, yes. Working capital can be part of a loan alongside your own money. See Can franchise finance cover the franchise fee and working capital?.
Don't underfund it
Running out of cash is one of the main ways new businesses fail. Lenders would rather see a realistic working capital figure than a stretched plan.
Last reviewed: 8 October 2026