When someone plans to invest in an American franchise through the E2 Visa, it's natural to focus on the initial investment amount. But there's an equally decisive point for the business's success — and one many people underestimate: the financial reserves needed to sustain the operation and the family until the business starts turning a profit.
Most businesses take time to reach breakeven after opening. During that period, the entrepreneur needs breathing room on two fronts at once: funding the operation until it pays for itself and covering the personal expenses of a family that moved across countries.
Reserve 1: the business's working capital
It's the money that keeps the operation running before it becomes profitable: rent, payroll, suppliers, marketing, and day-to-day costs. Franchisors, when stating the estimated total investment, usually include a recommended working capital amount for at least the first months. In the United States, that estimate appears in a standardized way in Item 7 of the FDD, which details the expected initial investment.
Reserve 2: the family's personal expenses
Every family has a standard of living, and the cost of keeping it varies a lot with the chosen US city. You need to estimate what that represents in dollars per month and secure a reserve covering the initial period, when the business doesn't yet generate enough income to support the household.
One of the biggest short-term failure factors for a business is precisely the lack of capital to hold on until maturity. It's not rare for a viable model to fail not because it's bad, but because the entrepreneur underestimated how much time and money it would take to reach breakeven.
The business plan's role
The best way to size these reserves is a detailed business plan projecting different scenarios — from the most optimistic to the most conservative — showing how much the operation needs to keep running until it turns profitable. Some models mature faster, others slower; the essential thing is understanding that rhythm with the franchisor and planning with a margin.
Models that help reduce the risk
When choosing the franchise, two designs tend to give more security to someone moving across countries: low fixed costs at the start (service models without an expensive location) and faster breakeven. Both are criteria we weigh in the selection for your profile — alongside margin, payback, and the fit with your life plans. For the E2, arriving with well-sized reserves also strengthens the case: it shows the business won't be marginal, with room to grow and hire.