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When choosing a franchise concept, prospects tend to ask one question first: what is my potential ROI (return on investment)? With thousands of different concepts out there, each with different levels of profitability, calculating the ROI of a franchise is complicated. Here are some of the basic points to consider:<ul><li>Potential earnings: Within the brand’s <a href="https://1851franchise.com/what-is-an-fdd-2705192">FDD (franchise disclosure document</a>), <a href="https://1851franchise.com/top-5-things-to-know-about-item-19-2703545">Item 19</a> offers performance information on existing franchised locations. The Item 19 is not a guarantee of how well the business will do, and franchisors are not required to provide one, but when available it offers statistical information that can help determine ROI.&nbsp;</li><li>Initial investment: The FDD also provides an approximation of the initial investment (<a href="https://1851franchise.com/the-most-important-items-in-an-fdd-item-7---initial-costs-2712071">Item 7</a>). The upfront costs obviously play a major role in the potential for ROI, and should be weighed carefully against a prospect’s available capital and potential financing. For those looking for low cost opportunities, mobile or home-based concepts tend to have <a href="https://1851franchise.com/10-low-cost-franchises-you-can-start-from-home-2713097">a much lower initial investment</a> as there are no construction or rent costs.</li><li>Franchisee and royalty fees: Most franchise concepts require initial and continuing fees paid to the franchisor, which can be found in <a href="https://1851franchise.com/initial-and-ongoing-costs-fdd-items-5-7-2703065">Items 5 and 6</a> of the FDD. These fees will also have an impact on the potential ROI.</li></ul>Dozens of variables combine to determine a franchise’s ROI, and many depend on the individual prospective owner/operator. To understand these factors, enlist the help of a <a href="https://1851franchise.com/how-a-franchise-consultant-can-help-put-you-on-the-path-to-success-2430">knowledgeable franchise consultant</a>, accountant or another financial advisor. These experts will evaluate the prospect’s specific situation and create a reasonable projection that details the return on investment the owner can expect to achieve.

What Is The Most Profitable Franchise?

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Here are some things to keep in mind when looking for the most profitable franchise opportunity.

Which Franchise Should You Buy To Get the Best ROI?

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Jollibee

How Jollibee Is Disrupting the QSR Franchise Industry 

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USA Ninja Challenge

How This Franchise Consultant Helps Entrepreneurs Find Purpose With the USA Ninja Challenge Franchise

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Busy Bee Jumpers

Bouncing Into Business: Meet Kayla and Jason Leonard, Busy Bee Jumpers’ New Franchisees 

Bouncing Into Business: Meet Kayla and Jason Leonard, Busy Bee Jumpers’ New Franchisees in Rhode Island

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Woodhouse Spas

Photo of exterior of Woodhouse Spa location

How Woodhouse Spas Leverages Learning Management Systems

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Image Studios

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Finding Freedom: Why Beauty and Wellness Professionals Build Their Dream Careers With IMAGE Studios

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Which Franchise Should You Buy To Get the Best ROI?

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