How much will I need in operating capital reserves to cover losses after opening the franchise until it reaches the break even point in terms of cash flow?

You’re not going to have any customers or revenue on the morning of your first day in your new business, but you will have expenses. Ask the company for averages and look for similar demographics for answers. Until your revenue grows enough to cover these expenses, you’re going to have to feed additional cash into the business to pay bills, so make sufficient allowances for this factor in your plans and, when in doubt, guess high. No one has ever gotten into trouble on a new business startup because he or she had put too much in financial reserves.