How a franchisee makes money

By Nick Hall | 27 Mar 2019 View comments
Looking to find your fortune in franchising? First you have to know how a franchisee makes money.

There are two ways a franchisee can get a return on their investment:

  1. By making enough money to put aside profits as the business is operating
  2. Selling the business and getting a big capital gain at the end

Both methods require you to have a strong grip on sales, turnover and brand equity.

How a franchisee makes money?

A good return on investment is dependent on three main factors:

  1. The purchase price of the business
  2. Ongoing costs
  3. The final sale

As a franchisee, like any business owner, you’ll be reliant on making these three numbers work in your favour.

Remember, franchising offers no guarantee of profitability.

So check those numbers thoroughly before you buy a franchise, and get an expert franchise adviser to check them too.

It’s hard to catch up if the finances are set up for failure.  It’s worth getting it right from the start.