Buying a Franchise

How Much Do Franchisees Make?

Piggy Bank On PenniesHow much can a franchisee make, on average? It depends who you ask.

Last year around this time, Entrepreneur Magazine undertook a special study on the income franchisees make. While they came up with some averages — over $80,000 in profits for restaurants, for example — they also focused on some individuals who racked up hundreds of thousands in profits.

And that’s the problem with averages. Franchise income can vary widely. It’s not just about success, either. One franchisee in the Entrepreneur story makes $400,000 a year in profits at his restaurants. One of the reasons is that he plowed funds back into his business, being aggressive with marketing and obsessive about analytics. His income might have been less than that of another entrepreneur at the beginning, but now he’s earning far more than the average franchisee.

The average profit for some industries is higher than others. Senior care franchises average $98,723 in annual profits, according to the Entrepreneur study, almost twice as much as the average fast food shop.The average can vary from one region to another, too; average incomes reported for individual franchise companies can be twice as high in some parts of the country as in others.

There are also sources that will give you a simple answer to the question, “What does the average franchisee earn?” The Wall Street Journal reports that the average franchisee earns $73,261 — if he’s a man. Women make about $20,000 less. Franchise Business Review, a research firm,  found that franchises average $66,000 in profit, which may be assumed to be the owner’s income. The difference may be simply because Franchise Business Review put male and female franchisees together.

However, saying “franchises” is not much different from saying “businesses.” That figure will include the income of a part-time home-based franchisee picking up some pocket money while the kids are at school — and a bustling boutique gym or mechanic’s shop. You might as well ask, “How much does the average worker make?” About $44,000, according to the government. Obviously, that number doesn’t tell you much about how much you’ll earn at your next job.

All these numbers just tell you the averages. Those numbers can be affected by so many factors that they have to remind you of the old saying about lies. There are three kinds, you may recall: “lies, damn lies, and statistics”.

Find out how you can predict how much you’ll earn from the specific franchise business opportunity you’re considering. We’ll tell you how! Download the free white paper for step by step instructions.

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