How Much Money do Franchise Owners Make?

Are you thinking about buying a franchise? If so, you probably wonder how much money you can make as a franchise owner. Various factors determine how much money you will be able to make. One of the most important factors that will affect your income as a franchise owner is the type of franchise you purchase. For instance, some franchises, such as Mediterranean fast food franchises, are quite profitable and have gained popularity. You’ll need to put in the work to make your franchise successful. 

In general, franchise owners can expect to make a good living, but there is no guarantee that they will become millionaires overnight. This article will discuss how much you can expect to earn as a franchise owner.

A report by the Franchise Business Review shows that the average income for fast food franchise owners is $80,000. This number will vary based on several factors, such as the type of franchise, the location, and the owner’s experience. 

The 80/20 Rule

Some outliers make significantly more than the average. For example, some fast food franchise owners may earn an annual income of $250 000 and over. This success drives many people to purchase franchises in the first place. However, when you correct for these outliers, you’ll find that 37% of fast-food franchisees make less than $50,000 a year.

It’s important to know that the annual income does not give the full economic potential of owning a franchise. For instance, a franchise could be earning you $50,000 a year. However, when you also value the real estate, the business, and the equipment, the true value of the franchise increases.

To get a better sense of what you could earn as a franchise owner, we’ve compiled a list of some of the most popular franchises showing their start-up costs and average annual incomes.

McDonald’s: The start-up cost of a McDonald’s franchise is $1 million. The average annual income for a McDonald’s owner is $150,000.

Subway: Starting this sandwich franchise will cost you $240,000. And you can expect an income of $41,000.

Dunkin’ Donuts: A Dunkin’ Donuts franchise will set you back $1.2 million. The average annual income for a Taco Bell owner is $100,000.

The Great Greek Mediterranean Grill: This Mediterranean cuisine restaurant has a start-up cost of $500,000. 

Now that you know how much money you can make as a franchise owner let’s look at the factors that will affect your income.

Type of Franchise

As previously said, the type of franchise you purchase will have a big impact on your income. Some franchises, such as McDonald’s and Dunkin’ Donuts, are well-known and have a proven track record of success. These franchises tend to be more expensive to purchase but offer a higher potential income.

In addition, it’s prudent to review a franchise FDD (Franchise Disclosure Document) before purchasing. The FDD will give you all the information you need to know about a particular franchise, including its business model, start-up costs, and recurring expenses.

The Franchise Owner’s Business Expertise

If you have experience running a business, you will likely be more successful as a franchise owner and make more money. This is because you will have the skills and knowledge necessary to manage a franchise effectively. However, it’s also reassuring to know that many franchises provide training and support to help you run your franchise successfully.

Stock Control

Effectively managing your stock will enable you to keep your costs low and increase your profits. If you’re not experienced in stock control, it’s important to seek advice from an expert or get training from the franchisor.

Staff Management

Hiring and managing staff is another important aspect of running a successful franchise. Having good peoples skills will enable you to build a strong team that will work well together.

Owning a franchise can be a great way to earn a good income. However, many factors will affect how much money you make as a franchise owner. The type of franchise you purchase, your business expertise, and your ability to effectively manage your staff and stock will all play a role in determining your success and earnings potential.

Overall, the amount of money you can make as a franchise owner will depend on several factors, including the type of franchise, your business expertise, and your ability to manage staff and stock effectively. However, with the right franchise and the necessary skills and knowledge, you have the potential to earn a six-figure income.