2021.4.12

How Much Do Franchise Owners Make?

Written by Austin Chegini

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If you want to start a business but need a helping hand, buying a franchise may be a wise move. Under this agreement, you can open an established business and get the full support of the managing company. You simply pay a few startup costs, and the franchiser will give you everything you need to open your business and begin making sales.

Franchise Business Review reports that the average franchise owner makes around $80,000 per year. However, this number is merely an average, with many people making below and above that figure.

Let’s see how much franchise owners make to see if running a franchise is a smart move.

How much do franchise owners actually make?

In the survey mentioned above, 28,500 franchise owners reported their income and some other demographic data. After researchers combed through the findings, they found some outliers had skewed the data. For example, the top 7% of owners earned over $250,000 per year, pulling up the average number by quite a bit.

After adjusting the results for these outliers, the actual average income for franchise owners was less than $50,000 per year. This number is staggering, to say the least, but it doesn’t paint the full picture. 

Franchise owners typically build equity, meaning they have an ownership stake in a business. Since this equity can be sold for a very handsome return, the annual income does not always show the true profitability of the business. 

For example, an owner might start a pizza restaurant and only earn $40,000 per year. However, the pizza restaurant and real estate (if owned) might eventually be valued at $2 million. The franchise owner can sell the business and land, earning a huge return on investment.

The average income of five famous franchises

The data above is helpful, but it isn’t the complete story. It includes all types of franchises, from everything from small coffee chains to multinational fast-food restaurants. 

Many new franchise owners will invest in trusted brands. Using data from Franchise City, let’s look at how much these business owners can expect from starting one of these famous franchises.

Chick-fil-A 

These restaurants are huge hits no matter where they open, but that is all part of strict franchise approval standards. Chick-fil-A only opens between 80-100 restaurants per year. 

The average location generates $4.16 million in revenue, with the owner earning around $200,000 annually. 

McDonald's

Opening a McDonald’s location is not difficult when it comes to standards, but it is very challenging in terms of costs. Starting a single location will cost over a million dollars, and you will need to find and pay for the real estate yourself. However, McDonald’s franchises are a safe investment given the huge demand for this brand.

The average location generates around $2.8 million in revenue, with the owner earning around $150,000 per year income

Burger King 

Where you find a McDonald’s, you often will find a Burger King. This franchise is a smart investment, but it will cost you between $2 million and $3 million to obtain a franchise. Luckily, most of these restaurants generate enough revenue to pay for this initial investment. 

The average Burger King generates around $1.4 million in revenue, with franchise profit coming in around $85,000 per year.

Dunkin' Donuts 

When you think of sweet treats and great drinks, does Dunkin Donuts come to mind? This brand offers a few franchise options, including buildings with drive-thrus, freestanding locations, and small shops in existing structures. Because of these options, a franchise can cost between $465,000 and $1.6 million.

The average Dunkin Donuts generates around $1 million in revenue, leading to a profit of $100,000.

Subway 

With the sandwich brand struggling to stay competitive in recent years, starting a Subway franchise is a somewhat risky venture. The average location costs nearly $235,000 to start, but the expected revenue is much lower than most other franchises. Likewise, hundreds of locations have closed recently, showing demand may be falling.

The average Subway franchise generates around $400,000 in revenue, with profit averaging around $41,000 per year. 

Start your franchise right with Epos Now

Whether you are franchising your business or buying into an existing franchise, you will need a powerful point of sale system to manage your business. When you need speed, savings, and flexibility, look no further than Epos Now. 

Our retail and hospitality POS systems are perfect for:

  • Processing transactions quickly
  • Managing wet and dry inventory
  • Connecting to third-party applications like QuickBooks
  • Hands-off management with 24/7 remote access

Contact our representatives today to learn more about Epos Now.

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