Running a coaching business has many challenges, but buying a coaching franchise might alleviate some of them. A franchise gives you a tried-and-true methodology and business model, so you don’t have to follow the unbeaten path.

Franchises have shown a success rate of 90% compared to 15% of companies started from scratch. That means that running a franchise might be as secure as being employed because of the extensive guidance you receive in setting up the business.

On the other hand, following a template has its own pitfalls, especially in life coaching, which focuses on individual transformation and personal challenges.

Read on to learn the pros and cons of buying a life coaching franchise and how to license your own practice.

What is a Life Coaching Franchise?

A life coaching franchise is a license you can buy to access a coaching company’s business knowledge, processes, and trademarks. When you do that, you can capitalize on the experience of a business with a proven track record and sell your coaching services under their name.

In exchange for buying this license, you pay your franchisor an initial start-up and annual licensing fees based on your revenue. This investment buys you a framework, clarity, and ongoing support in your business, so you can minimize risk and have a higher chance of succeeding.

So, is it worth buying a life coaching franchise instead of doing things your own way? Let’s look at the pros and cons of this investment opportunity in detail.

[ Read: How To Invest In Your Business: The Four High-Return Moves For a Coaching Practice]

The Pros & Cons of Buying a Life Coaching Franchise

Pro: You Get Ready-Made Frameworks

Gathering an inventory of proven coaching frameworks and tools can take years or even decades. Instead, you can access it by buying a life coaching franchise.

These ​​exercises, models, and support materials will give you a solid foundation on which to stand when serving your clients, allowing you to guarantee their results.

Con: You’re Copying a Mainstream Approach

Franchises have a set framework that is often quite rigid. This ensures their ability to consistently deliver the same results but leaves little room for creativity and innovation.

You won’t be able to tweak the methodology as you gain more insight into your practice. Instead, you’ll need to follow their step-by-step guidelines on branding, pricing structures, and coaching itself.

This option might appeal if you prefer to implement what already works without reinventing the wheel. However, if you’re a natural innovator and want to do things your way, this option will probably be too restrictive.

Pro: You Can Operate Under a Recognized Brand Name

Building a trusted brand takes time and resources. Some of the biggest coaching brands in the world today started decades ago. With a franchise license of an established brand, you can reap those benefits immediately.

Your franchisor might add you to their referral network or connect you with new leads to help you grow your clientele. This will save you time and effort on client acquisition that you can, instead, spend on what you love doing the most: coaching.

Con: The Cost Might Be Higher Than You Think

Licensing costs can be tens of thousands, or in some cases, hundreds of thousands, of dollars. Annual costs also significantly reduce revenue that could otherwise be spent on, for example, a business coach or new marketing strategies.

Additionally, many licensors require you to follow set pricing structures, which tie your hands when it comes to scaling. Make sure you have a solid financial projection in your business plan if you take the risk so you won’t be left with little to nothing after paying off your yearly licensing costs.

Pro: You Start With a Track Record

In the early stages of a business, there’s a lot of trial and error, and it can be costly. Many founders never reach profitability and might even quit their business in debt.

Getting a franchise deal gives you a tailor-made plan for a profitable and sustainable business that gives you a sense of security as an entrepreneur. Franchisors may also support you with business mentors to ensure your success in the long run.

Con: Might Not Be Suitable for Life Coaching

Most franchise opportunities in this industry cater to business coaching. There are life coaching franchises, but they often have a limited methodology that doesn’t suit a truly holistic approach.

In general, business coaching frameworks are more likely to work when replicated and scaled but not the tools a complex human being requires to change their lives.

Ensure you thoroughly research your franchisor’s approach and consider whether they will limit or aid you in serving your clients.

Examples of Coaching Franchise Opportunities

ActionCOACH

ActionCOACH is the most well-known business coaching franchise with three decades of experience. It has over a thousand franchisees in 70+ countries who work with over 18,000 clients worldwide.

Their franchise fee is $75,000, and their total costs range from approximately $140,000 to $370,000.

They offer regular seminars and training to their network of coaches and provide them with a wide array of tools, technology, and marketing assets. It’s a great support network for setting up and running a business successfully.

The Entrepreneur’s Source

The Entrepreneur’s Source helps aspiring coaches find and transition into their dream careers.

They provide a framework that can be applied to any business size, whether you want to run your coaching center by yourself or expand it into something bigger.

They require approximately $125,000 as an initial investment, and it takes about 4-6 weeks to get onboarded with them.

The Growth Coach

Unlike most franchises, The Growth Coach focuses on a unique group coaching model that allows coaches to work with more clients within a standard workweek.

Their franchise fee is currently $39,900, and new coaches must invest $54,000 to $75,900. They offer comprehensive support to establish a successful coaching practice.

Honorable Mentions

Additionally, here are three of the biggest coaching franchises that train specialized coaches:

• Sandler Training: Specializes in sales, management, and leadership training.
• FocalPoint Coaching: Based on the teachings of Brian Tracy, FocalPoint focuses on business performance and leadership skills.
• Expense Reduction Analysts (ERA): Focuses on helping businesses optimize costs and profitability through specialized coaching and consulting services.

How to Launch Your Own Coaching Franchise

If you have a profitable and reputable coaching center with a proven track record, consider franchising it and scaling it with other coaching professionals. 

As a franchisor, you’ll grant your new franchisees the right to start coaching businesses under your trademark. You’ll share your business systems with them and provide them comprehensive training and ongoing support.

In exchange, they will pay you an initial franchise fee and yearly royalties. Your aim is to make them as successful as possible so that your brand can grow and your royalties can rise yearly.

To do that, you’ll need to familiarize yourself with franchise laws in your location, so it’s best to hire a specialized lawyer. You’ll need to:

• Acquire a disclosure document with information about royalties, territories, start-up costs, etc.
• Update this document annually and share it with your new franchisees 14 days before signing an agreement.
• Create an operations manual with the terms of establishing and operating a franchise business under your trademark.
• Register your trademarks and establish your new franchise company.
• Develop a marketing and sales strategy to target your ideal franchisees and promote your program.

Being a franchisor can scale your revenue big time and open doors to passive income. It’s a business model that can yield high profits in the long run.

However, it will only work if your coaching business already has an established brand and a stable cash flow. Your guidelines need to be watertight and easily replicable by a diverse set of people in different locations.

[ Read: Don’t Settle on a Coaching Name Until You’ve Read This]

Lucrative Alternatives to Franchising

To scale your coaching business, you don’t have to become a franchisor. One alternative is to create a certification program.

In this scenario, you can create a comprehensive, vetted training program for coaches who will be responsible for setting up their own businesses independently from you. They can add your certification to their portfolio, but they will be operating under their own brands.

Opening a certification program lets you cash in on the experience and methodology you’ve built with your business, free from the extensive regulations franchisors must comply with. However, you won’t be able to generate passive income from yearly licensing fees.

Another option is to launch an education platform for coaches where you teach them your methodology and how they can start, run, and scale their practices.

This business model requires the least commitment as an online education platform. Once you set up and automate your learning portal, you’ll only need to focus on driving traffic to your marketing funnels and supporting your new students on their learning journey.

Editor’s Note: This post was originally published in September 2021 and has since been updated for accuracy.