They are a business that’s already created and often enjoys instant success. It is set up so that you or other interested parties can purchase the businesses name and set up an establishment that you call your own. In exchange for buying into the franchise, you benefit from an already established branding and marketing concept. While many people like the idea of buying into a franchise, they often hesitate. The reason for the hesitation is that they can’t stop wondering, do franchise owners make money?
The exact amount of money a franchiser can anticipate earning varies. Factors include the type of franchise they purchase, location, size, and the overall success of the franchise. In 1979, the FTC passed legislation that required franchises to report certain things to the government and potential owners. The purpose of the legislation was preventing franchises from misleading potential owners. The information doesn’t have to be presented to the general public, which means only people who express genuine interest in becoming a franchise owner will see how much the average franchise owner makes.
A report presented by the Franchise Investigator Website indicated that in 2010, the average franchise owner made between $75,000 and $125,000 in 2010. It was also reported that approximately 30% of all franchise owners earned more than $150,000 annually. Considering that was at the tail end of a recession, it’s reasonable to assume that the average franchise owner currently earns more.
If you’re considering becoming a franchise owner, understand that there are some expenses involved. The biggest expense is purchasing a location and buying into the franchise. Other expenses include getting the building ready, training and paying employees, and local advertising. The good news is that most reputable franchises have a system in place that provides some financial support. Really good master franchisers are quick to provide you with training and will offer suggestions that help you lower operating costs and improve profit margins.
Research is the key to knowing how much money you’ll earn as a franchise owner. Chose a couple of franchises you find appealing and learn as much about them as possible. In addition to contacting the head office and asking for reports, meet with individuals who already own a part of the franchise you’re considering and interview them. In addition to inquiring about how much they earn annually, find out how much support they get from the master franchiser, how much involvement they have in the running of their establishment, and if they are still happy with their decision to become a franchise owner.
The future is bright for franchise owners.