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Call me a crazy person, but stick with me on this topic: is the juice worth the squeeze when growing a franchise business to $1 million&nbsp;AUVs?

I have thought a lot about the fight for more and more average unit volumes&mdash;and I certainly understand the why behind it&mdash;but, let me fight through a counterpoint to see if there is as much value in a $1 million AUV versus an $800,000 one.

Let&rsquo;s start with the positives:

<ol>
	<li>You have a stronger Item 19&mdash;or at least a marketable term in creating a $1 million business opportunity.</li>
	<li>In theory, more money should create higher EBITA.</li>
	<li>There is something magical about owning a million-dollar business &ndash; thus, maybe (just maybe) that helps the perception of the franchisees and increases validation.</li>
	<li>$1 million&nbsp;AUVs means $50,000 (5&nbsp;percent royalty) per location back to the franchisor.</li>
</ol>

How about some variables:

<ol>
	<li>Sure, there are businesses that are meant to be over $1 million&nbsp;in business. But it is not an all-encompassing message for all franchisors. The message is more so around not being what you aren&rsquo;t.</li>
	<li>Viral brands that have the operational support should be able to crush limitations &ndash; meaning, if you have an incredible product that people rave about, then, that buzz will automatically drive your unit sales higher.</li>
</ol>

Now, let&rsquo;s make some assumptions:

<ol>
	<li>There is a lot of buzz around low-cost franchise brands. Some of the fastest growing brands have nailed the price point that reaches the masses.</li>
	<li>Those low-cost franchise brands rarely reach millions in gross revenue.</li>
	<li>There is also a lot of buzz around the idea that everyone wants to own a restaurant.</li>
	<li>The reality is, not everyone can afford a restaurant.</li>
	<li>The more the investment costs climb, the fewer prospects exist. More money means fewer buyers.</li>
</ol>

So, for argument&rsquo;s sake, let&rsquo;s take a $500,000 investment and say you have 100 locations. Then, let&rsquo;s say 30 percent of your franchisees produce volumes more than $1 million, 30 percent are between $800,000 and $1 million&nbsp;and 40 percent are below $800,000. Within that grouping, the top 30 percent then averages $1.3 million, the next 30 percent averages $900,000 and the bottom averages $700,000. For this example:

<ul>
	<li>Top 30 percent: 30 locations X $1,300,000 = $39 million</li>
	<li>Next 30 percent: 30 locations X $900,000 = $27 million</li>
	<li>Bottom 40 percent: 40 locations X $700,000 = $28 million</li>
	<li>Total System-Wide Sales: $94 million</li>
	<li>Actualized AUV: $94 million / 100 = $940,000</li>
	<li>Total Royalty to Franchisor (5&nbsp;percent): $4.7 million</li>
</ul>

Some notes about the above:

<ol>
	<li>We sure as hell know the bottom 40 will complain a lot. A LOT. Why?
	<ol style="list-style-type:lower-alpha">
		<li>You sold them on the fact that the top 30 percent did $1.3 million&nbsp;in sales. It doesn&rsquo;t matter if you disclose the fact that it is your top 30 percent; that&rsquo;s the number prospects listen to.</li>
		<li>The initial investment is really built around the potential for $1.3 million&nbsp;in sales (or perhaps $1 million). For argument&rsquo;s sake, let&rsquo;s say the average ticket is $15. That&rsquo;s 66,666 transactions/year, 5662/month or 182/day. It helps you figure out seats, labor, food/product, etc.</li>
		<li>When they think they will make, for argument&rsquo;s sake, at least $1 million, 70 percent of your system is not reaching their so-called potential and has some sense of frustration.</li>
		<li>For every franchisee who doesn&rsquo;t validate, add more $$$ in franchise marketing to find new franchisees.</li>
		<li>The reality is this brand is upside down, even though it appears it isn&rsquo;t.</li>
	</ol>
	</li>
</ol>

Example 2: A franchisor who&rsquo;s actual AUV is $800,000 and the investment is 20 percent less than example one ($500,000 X .20 = $100,000 less) at $400,000.

<ul>
	<li>Top 30 percent: 30 locations X $900,000 = $27 million</li>
	<li>Next 30 percent: 30 locations X $800,000 = $24 million</li>
	<li>Bottom 40 percent: 40 locations X $700,000 = $28 million</li>
	<li>Total System-wide Sales: $79 million</li>
	<li>Total Royalty to Franchisor (5&nbsp;percent): $3.95 million</li>
</ul>

Some more points:

<ol>
	<li>Franchisors will pull in $750,000/less/year.</li>
	<li>Question: Is a $400,000 unit easier to grow?</li>
	<li>How about marketing? Easier to drive fewer people?</li>
	<li>Does real estate change at all?</li>
	<li>Do operations become easier?</li>
	<li>The bottom 40 percent is frustrated because they are not hitting their full potential ($800,000 AUV). That&rsquo;s slightly better than 70.</li>
	<li>Which brand has more growth potential in today&rsquo;s market?</li>
	<li>Is it worth giving true AUVs even if it doesn&rsquo;t give the marketing hook?</li>
	<li>What&rsquo;s more valuable, expectations met long-term or not (for franchisees)?</li>
</ol>

Now, if I have kept you engaged this long, you are probably saying sure, makes sense, but won&rsquo;t happen in reality. But, do brands take steps toward rearranging their sell? Do they re-engineer their models to fit more humans who could potentially buy? Doesn&rsquo;t a lower investment and a lower return help with validation in that expectations are more aligned?

The truth is, I don&rsquo;t know the complete answer. But, I have certainly spent a lot of time thinking about it. I would love for you to share your thoughts with me on this topic.

Nick Powills: Should You Fight to be a $1 Million Franchise Brand? 

1851 Franchise

Let's fight through a counterpoint to see if there is as much value in a $1 Million AUV versus an $800,000 one.

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How much can franchisees make? It’s a question many prospective owners ask before investing in a franchise. While earnings tend to be driven by variables such as industry, location and general management skills, a proper understanding of the key factors driving profitability can help franchise owners develop expectations that are realistic.&nbsp;Multi-unit franchisee&nbsp;<a href="https://www.linkedin.com/in/mangesh-patel-9368569/">Mangesh Patel</a>, who’s readying the launch of six&nbsp;<a href="https://www.beefobradysfranchise.com/">Beef ‘O’ Brady’s</a> restaurant locations in the Macon, Georgia area, shares insights from his franchising experience.<h2>Understanding Franchise Income</h2>Keeping operational costs in check can have a major impact on overall earnings. Taking a proactive approach to expenses such as food and labor, as well as payroll and scheduling, can help align actual franchise income with general expectations for the business.“I just had a meeting with a couple of people, and they said, ‘You talked about a 25% profit margin, but I’m only doing 12%.’ So, I looked at the figures they sent me,” Patel said. “Their&nbsp;<a href="https://1851franchise.com/calculate-restaurant-franchise-profit-2730476">restaurant</a> food cost was running at 37%, which should be around 30%. The national average is about 32%. If I do things correctly, my average food cost needs to be at or below 30%. And payroll should run around 18%. But many people run 25 to 28%.”So,&nbsp;<a href="https://1851franchise.com/unraveling-franchise-earnings-how-much-can-you-really-make-2723935">how much can franchisees make</a>? Here are five areas to consider.<h2>Practical Tips for Prospective Franchisees</h2><ol><li>Control Costs From Day One:&nbsp;It’s important to monitor payroll, food and supply costs closely. Overstaffing and inefficiencies can quickly reduce profits.</li><li>Plan For The Opening Surge:&nbsp;Traffic within the first few months of opening is likely to be higher. It’s important to adjust staffing and inventory accordingly, and pay close attention to how those levels change as time goes on.</li><li>Invest In Training:&nbsp;Properly trained workers can help reduce waste and improve overall service, which has a direct effect on net income.</li><li>Understand Your Market:&nbsp;Each market is unique and revenue potential will vary depending upon location, demographics and competition.</li><li>Track Metrics Regularly:&nbsp;Food cost percentages, labor ratios and weekly sales data act as key indicators operations may need to be adjusted.</li></ol><h2>What Profitability Really Comes Down To</h2>Patel notes that if franchise owners manage labor and costs properly, it’s not impossible to achieve strong cash flow even in the first year, bucking some franchising trends.So,&nbsp;<a href="https://1851franchise.com/how-much-can-you-make-as-a-franchise-owner-2724761">how much can franchisees make</a>? While results tend to vary, careful planning, disciplined operations and a proactive approach to assessing initial costs are essential. But by grasping and guiding the elements that drive franchise profitability, franchise owners can maximize overall business earnings, scaling a business that’s sustainable financially over the long term.Want to learn more about franchise opportunities on 1851 Franchise? Be sure to visit our&nbsp;<a href="https://1851franchise.com/power-rankings">Power Rankings</a> to read more on brands making moves.

How much can franchisees make? This guide explains what drives franchise earnings and how to manage costs, with expert tips from multi-unit owner Mangesh Patel on maximizing your franchise income.

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What industries are trending in franchising? As consumer behavior continually shifts and technology continues to drive the further evolution of operations, some franchising sectors are gaining momentum, offering opportunities for franchise owners at any experience level.A proper assessment of trending franchise industries can help zees ensure alignment of the investment against lifestyle goals, scalability of a given model and general demand over the long-term.<h2>Why Certain Franchise Industries Are Gaining Traction</h2>Franchise trends are often driven by lifestyle changes, demographic shifts and evolving expectations in terms of desired flexibility and convenience. Lifestyle-driven franchising is playing a growing role and industries that combine the notion of service-based models (with flexibility and less overhead) are also increasingly attractive.“Recently, during our 2025 national conference, our co-CEO mentioned that this has been a booming time for leisure travel,” said&nbsp;<a href="https://worldtravelholdings.com/">World Travel Holdings</a> Public Relations and Corporate Communications Manager,&nbsp;<a href="https://www.linkedin.com/in/michael-cadigan-3a156b86/">Michael Cadigan</a>. “Not just for people booking trips but for those entering the industry because of the lifestyle it offers.”<h2>Trending Industries</h2>So, what industries are trending in franchising?&nbsp;Here are five that stand out:1.&nbsp;<a href="https://1851franchise.com/what-are-the-best-travel-agency-franchises-2721343">Travel And Leisure</a> Franchises tied to leisure travel are benefiting from renewed demand and remote-friendly operations.&nbsp;“As long as you have a stable internet connection, you can stay plugged in with clients and customers,” Cadigan said. “Being able to work from anywhere allows people to enjoy the lifestyle they’re looking for.”2.&nbsp;<a href="https://1851franchise.com/low-cost-home-service-franchises-2729482">Home And Property Services</a> Maintenance, repair and specialty home services remain popular due to aging housing stock and infrastructure, which can deliver something close to recession-resistant demand. These franchises often feature lower startup costs and scalable operations.3.&nbsp;<a href="https://1851franchise.com/best-health-and-wellness-franchises-2026-2730886">Health, Wellness And Recovery</a> From fitness studios to recovery and wellness concepts, franchises focused on physical and mental health are continuing to grow as American consumers prioritize long-term general health.4.&nbsp;<a href="https://1851franchise.com/exploring-eco-friendly-franchises-for-world-environment-day-2725492">Eco-Friendly And Sustainable Services</a> Franchises focused on cleaning, energy efficiency and sustainability-focused services appeal to entrepreneurs prioritizing values (they also tend to tout recurring revenue and tighter operating models).5.&nbsp;<a href="https://1851franchise.com/ai-impact-restaurants-franchises-human-centric-technology-2730903">Technology-Enabled Retail And Services</a> Brands utilizing tech like automation (or data and digital platforms) are improving overall efficiency while minimizing labor challenges (rendering tech-forward franchises en vogue).<h2>Key Takeaways</h2><ul><li>Follow lifestyle-driven demand (as opposed to hype) &nbsp;</li><li>Assess scalability and overhead (before investing) &nbsp;</li><li>Seek out industries with recurring or essential services &nbsp;</li><li>Assess whether the business model supports flexibility &nbsp;</li><li>Align industry trends with your long-term goals</li></ul><h2>The Bottom Line</h2>So, what industries are trending in franchising? Travel services, home services, wellness, sustainability and tech-enabled concepts are all experiencing continual momentum at the moment. By developing a thorough understanding of where demand is growing and why, prospective franchise owners can make better decisions and invest with confidence in industries well-positioned for strong long-term success.Want to learn more about franchise opportunities on 1851 Franchise? Be sure to visit our&nbsp;<a href="https://1851franchise.com/power-rankings">Power Rankings</a> to read more on brands making moves.

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Building&nbsp;<a href="https://1851franchise.com/how-do-you-build-a-franchise-business-plan-2717037">a business plan</a> is a crucial operational step for any entrepreneur. But how do I build a business plan for a franchise that complements the franchisor’s system while addressing the unique needs of a given location? In this guide with expert tips, you’ll learn how to craft a thoughtful, actionable franchise business plan.<h2>Start With The Franchisor’s System In Mind</h2>So, how do I build a business plan for a franchise? Well, avoiding repetition is a good start.“You specifically don’t want to duplicate what your franchisor is doing,” said long-time multi-unit&nbsp;<a href="https://www.solafranchising.com/">Sola Salons</a> franchise owner,&nbsp;<a href="https://www.linkedin.com/in/haynes-chidsey-6a36a06/">Haynes Chidsey</a>. “There’s a reason why you join a franchise system and why you pay the fees and costs associated with it.”A strong franchise business plan should take advantage of the resources, marketing and operational systems that the franchisor provides (while utilizing daily experiences at the local level to help fine-tune what matters locally).<h2>Focus On Local Priorities</h2>A franchise business plan should be&nbsp;<a href="https://1851franchise.com/strategicfranchising/how-to-build-a-strong-franchise-brand-presence-in-your-local-community-2729771">locally focused</a>. It should reflect the unique characteristics and needs of each local market. It’s essential to identify opportunities to attract local customers, build relationships within the community at the local level and tailor services to the regional preferences required by each market.“Be complementary to what your system provides,” said Chidsey. “Stay locally focused. That’s what I would say is key. Avoid mistakes by focusing on the magic.”<h2>Practical Steps For Building Your Plan</h2><ol><li>Assess Both Market And Competition – Build a thorough understanding of local demand, competitors and potential customer base. This will lead to more informed projections. &nbsp;</li><li>Define Financial Goals – Include startup costs, ongoing fees and revenue expectations in the business plan. Staffing, rent, marketing and working capital should all be factored in. &nbsp;</li><li>Leverage Franchisor Resources – Incorporate the systems, training and support offered by the franchisor (instead of reinventing processes). &nbsp;</li><li>Set Operational Priorities – Decide which areas require hands-on local management (as opposed to areas guided by the franchisor). Focus energy where it’s most impactful. &nbsp;</li><li>Review And Adjust – A business plan shouldn’t be static. So, track performance, adjust strategies and refine priorities as the franchised business scales.</li></ol><h2>The Takeaway</h2><a href="https://1851franchise.com/chapter-3-developing-a-franchise-business-plan-2722586">Creating a franchise business plan</a> is about balance. With a clear plan that integrates franchisor resources and local insight, franchisees can confidently move forward, knowing their businesses are structured to thrive. Leveraging a proven franchisor system to make smart, locally relevant decisions is key. By slowing down to go fast, and catering to the local trends or demands unique to each market, zees can more effectively build a roadmap and franchise business plan capable of delivering long-term success.Want to learn more about franchise opportunities on 1851 Franchise? Be sure to visit our&nbsp;<a href="https://1851franchise.com/power-rankings">Power Rankings</a> to read more on brands making moves.

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Is franchising better than starting a business from scratch? For many&nbsp;<a href="https://1851franchise.com/a-beginners-guide-to-franchising-how-the-model-works-2724686">prospective entrepreneurs</a> weighing the idea of ownership, the answer to that question can be both yes and no. Franchising offers a proven system and built-in support. Starting from scratch allows greater flexibility and control. And a proper understanding of the trade-offs can help potential owners decide which path is most aligned with their business goals.According to&nbsp;<a href="https://drymedicfranchise.com/">DRYmedic Restoration</a> franchisee&nbsp;<a href="https://www.linkedin.com/in/keith-carlson-29b0a930/">Keith Carlson</a>, the appeal of franchising often starts with structure. “The yes is that you have an automatic blueprint,” he said. “You’re in. You don’t have to think of everything. You don’t have to come up with your business plan or your marketing plan.”As Carloson noted, franchisors generally provide detailed guidance on everything from licensing and certifications to business structure. “All of those things are done. Or they’re in a list or part of a large checklist,” he said. “From that perspective, it’s simpler on the back end.”<h2>Franchising Vs. Starting From Scratch: Key Considerations</h2>So,&nbsp;<a href="https://1851franchise.com/buying-a-franchise-vs-starting-from-scratch-2725815">is franchising better than starting a business from scratch</a>? Here are five areas to consider:1. Built-In Systems Vs. Total Control Franchising provides a tested playbook. But it comes with rules. “If you’re in a franchise, every time you want to do something that’s outside their playbook, you have to ask permission,” Carlson reminds. Independent owners, on the other hand, can pivot freely but must build systems from the ground up (which takes time and resources).2. Fees and Royalties Franchise fees and royalties are part of the deal. It’s important to both understand and plan for them accordingly.3. Experience and Support One of franchising’s biggest advantages is access to experienced operators. Carlson recalled his first job after signing his initial work order: “I was nervous. But I had somebody on the phone within 10 minutes saying, ‘You’ve got to do this, this and that,’” he said. “It was so easy to get through that first job because there was no guesswork.”4. Following The System (With Local Flexibility) While local nuances aren’t always captured in a national system, the strength of a proven system remains a franchising hallmark.5. Long-Term Upside Starting a business from scratch can be more lucrative. “But it depends on the level of effort you want to put in,” Carlson reminds potential zees.<h2>The Bottom Line</h2>So, is franchising better than starting a business from scratch?&nbsp;<a href="https://1851franchise.com/franchising-and-the-american-dream-2730380">Franchising</a> can reduce risk, shorten the learning curve and provide critical support (especially early). Independent startups can offer more autonomy and, potentially, greater long-term rewards. Therefore, an honest assessment of tolerance for structure, fees and self-direction can help those considering entrepreneurship to properly assess the ownership situation best aligned with one’s goals for success in the business opportunity.Want to learn more about franchise opportunities on 1851 Franchise? Be sure to visit our&nbsp;<a href="https://1851franchise.com/power-rankings">Power Rankings</a> to read more on brands making moves.

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Nick Powills: Should You Fight to be a $1 Million Franchise Brand?

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