Can You Get Rich Owning Franchises?

Franchising offers a wide variety of benefits, but like any business venture, the primary goal is profitability. The million-dollar question, literally and figuratively, is just how much money can you make in franchising?

Unfortunately, this information is rather difficult to find. According to a survey done by Franchise Business Review, the average pre-tax annual income of franchise owners in the U.S. is about $80,000. However, only 7% of franchise owners earn over $250,000 per year with 51% earning less than $50,000.

Franchisors legally cannot provide income amounts or projections of future income. This is more of a protection for the franchisor as they can’t guarantee the same performance for every franchisee.

Instead, prospective franchisees are advised to check out a franchisor’s Item 19, the section of its franchise disclosure document (FDD) that outlines the brand’s financial performance. The Item 19 usually includes both gross and net numbers so franchisees have a more realistic idea of the brand’s potential.

Industry surveys and studies provide a glimpse into potential earnings. Here are some things to keep in mind when you’re looking at franchise ROI.

Profit vs. Initial Investment

Your earnings potential as a franchise owner depends largely on the brand and industry.

Franchise owners in the restaurant industry earn an average of $82,000 per year, which is pretty solid considering the salary range of a non-franchise restaurant owner can range from $24,000 to $155,000.

Startup costs, however, can range anywhere between $100,000 to millions of dollars.

A Chick-Fil-A franchise, for example, generates $4.1 million on average annually with an initial investment of $10,000. Dunkin’ Donuts locations bring in about $974,000 annually on the low end with startup costs ranging from $465,000 to 1,597,000. 

The results are vastly different when you look at other industries. The single highest-grossing cleaning franchise generates $1.3 million per year with an initial investment of $150,000 to $200,000. And one of the leading staffing franchises generates $6,500,000 on average annually per franchise with an initial investment of $150,000.

Request an FDD with and Item 19

For potential franchisees doing research, this lack of financial information can be frustrating. If you’re looking to buy a franchise, start by requesting an FDD and prioritize those that include an Item 19. That way, you can have a fuller picture of other franchisee performance and a baseline with which to start.