How Much Do Franchise Owners Make? Understanding Franchise ROI

If you’re considering investing in a franchise, one of the most pressing questions you likely have is, “How much do franchise owners make?” Truth is, there’s no definitive answer. A franchisor cannot make any promises regarding revenue or profit. However, with research, you can formulate an idea as to how much you’ll make as a franchise owner – you just have to know where to look.

Where to Learn How Much Franchise Owners Make

When exploring franchise opportunities, one of the essential pieces you’ll want to review is the franchise disclosure document (FDD). The FDD is a legal document that all franchisors must provide potential investors during the franchise discovery process. It contains detailed information about the brand and the franchise system, including financial statements, background of key personnel, litigation history, fees, and other important aspects of the franchise relationship. The FDD is designed to protect both parties by clearly defining the roles and responsibilities of the franchisor and franchisee.

Within the FDD, Item 19 includes Financial Performance Representations. Here you’ll find various financial data, including revenue figures, expenses, and sometimes even profit margins from franchise locations that have been open and operating for the last fiscal year. This information can give you a glimpse into the financial health of the franchise system.

However, it’s crucial to interpret the financial performance numbers with caution. Keep in mind the figures presented may not represent typical results for all franchisees. Individual performance can vary based on a multitude of factors. Note, too, that Item 19 is an optional section and not all franchisors will disclose financial performance data There are solid reasons why a brand may not have an Item 19 (brand just started franchising, too little locations, etc.), but it’s important to know the justification behind leaving that section out.

What Dictates Franchise Owners’ Earnings?

While there’s no one-size-fits-all answer to this question, franchise owners’ salaries can vary widely depending on multiple factors:

• Location: A good business location is one that is visible, easily accessible, and has plenty of parking available for customers.
• Industry: Conduct industry research to understand if the market is growing. If the industry seems to be on the decline, making an investment may not be the best idea.  
• Brand reputation: Investing with a reputable franchise is important. Get an understanding of the public’s perception of the brand before signing an agreement.
• Market demand: Partnering with brands who have a strong market presence and high consumer demand often offer greater revenue-generating opportunities.
• Individual business management: Franchisees who effectively follow the brand’s proven business strategies, provide excellent customer service, and adapt to changing market trends have a higher chance of success.

Before you make a final decision to partner with a brand, do thorough research and consult with financial advisors to develop a realistic financial forecast for your franchise venture. To calculate your potential return on investment (ROI), consider the initial investment costs, ongoing expenses (including royalties and marketing fees), and revenue projections.  

Franchise with Always Best Care

As an entrepreneur who wants to open a franchise, it’s common to immediately think of QSR or fast-casual restaurant brands. However, don’t overlook the rewarding opportunity to join a home healthcare franchise like Always Best Care. We offer an affordable franchise with startup costs ranging between $89,725 and $145,900, including our $49,900 franchise fee. Plus, our franchise locations offer a variety of care services such as special care, respite care, skilled home health care, in-home care, dementia care, and senior living referral. With our Continuum of Care, our franchisees are able to support their clients through many life stages, while simultaneously building multiple revenue streams.

Interested candidates must have a net worth of $200,000 and at least $100,000 in liquid assets to qualify for an Always Best Care franchise.

To learn more about our franchise opportunity, request information today, and one of our representatives will be in touch with you soon.