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How Much Can A Franchisee Make Annually?

Franchisee income

Franchisee income

This question (supposedly) jump out of a franchisee candidate’s mind: How much can I make from this franchise opportunity?

Unfortunately, the answers can be vague, misleading and, in a sense, secretive. The income reports you saw publicly (such as in franchise expos) are either averages or forecasts/projections.

Franchise companies are not in the habit of telling prospective franchisees how much their franchisees are making annually. Even if they do, I’m sure the answer would be in the form of averages, with different methods of calculating averages from one franchise to another.

Unfortunately, averages are misleading and, due to that, I don’t really like anything based on averages. What’s more, due to different averages calculations, the financial report is presented to prospects in various forms, making it virtually impossible to compare among franchises across different franchise categories or industries.

How much you can make as a franchisee

I have just read a BusinessWeek article, written by Blue MauMau’s Don Sniegowski (more explanation on franchise earnings claim topic on his blog), that gives us the idea of how much a franchisee can make annually.

Sniegowski explains that before a franchisee candidate make any amount of investment on a franchise opportunity, he/she has to have a clue on how much they can make from their investment (a.k.a. the Return-on-Investment or ROI.) A common sense that, surprisingly, many franchisee candidates ignore in buying a franchise.

From his interview with Robert Bond, who has two decades of experience researching earnings claims, is the publisher of World Franchising Network and the author of the book, How Much Can I Make?, it is suggested that, on average, a franchisee would make $60,000 a year in the form of salary by working 60 to 80 hours a week. “And that may or may not include a decent return on their investment,” Bond added.

Regardless the averages claimed and discrepancies involved, in my opinion, $60,000 a year, 60 to 80 hours work week, all probably in $250,000 to $500,000 total investment, is a bit steep, indeed. If the estimations were to be considered as facts, I wonder why people – including me – are rushing to buy a franchise opportunity instead getting a job.

The common sense: Be sure before you buy

Of course, my statement above is rhetoric, at least to me.

Just like in any forms of business ownership, owning a franchise unit is owning an asset. In the other hand, a job is not an asset (therefore I despise the idea that regards franchise ownership as a job.)

So, a question: Can you make more than $60,000 annually with less than 60 hours work week? Absolutely, if and only if you do your due diligence before investing your money in a franchise opportunity.

You should rigorously analyse what’s inside the Uniform Franchise Offering Circular (UFOC), especially, in this article’s case, the fees and expenses, the earning claims and the financial statements.

Unless you are familiar with financial numbers, the best route for you is to consult with a trusted franchise consultant.

Ivan Widjaya
Franchisee income

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