Can You Make $100K As A Franchise Owner?

About Franchise Owner Profitability

When it comes to franchise profitability, the Federal Trade Commission (FTC) has very strict requirements for franchisors about how they can present earnings statements (claims) to prospective franchise owners.

For instance, if a franchisor chooses to disclose earnings claims (many franchisors choose not to) they must be provided in writing-in the Franchise Disclosure Document (FDD) and all material information must be accurate and substantiated. But even then, it can be difficult to decipher the real numbers, as they're usually averages.

That said, don’t throw in the towel just yet. There's a way for you to find out how much franchise owners make in the franchise system you’re interested in potentially becoming part of. I’ll tell you how in a minute.

If you’re researching a franchise that happens to provide an earnings claim in their FDD, you’ve already saved a little time. You’ll be able to see in black and white how long it takes for revenue to start coming in, approximate break-even times, and maybe franchisee profitability. However…

Even if the franchisor does provide an earnings claim in their FDD, it would still behoove you to contact several existing franchisees to verify the figures.

So trust, but verify.

How To Verify Franchise Owner Profits Of $100k

If you want to know if you can make $100k as a franchise owner, you need to go to the people who are already franchise owners.

That's because I’ve found that franchisees-for the most part, are more than willing to spend some of their valuable time with you discussing their experiences as franchisees. Including sharing their financial/income information with you. But it comes down to how you ask for it.

Note: contacting and visiting franchisees in-person is the most important part of your research. Make a commitment (right now) to call and talk with 10-15 franchisees of the franchise company you’re interested in. In most cases, you’ll be able to get a good feel for how much money franchisees are making, how long it takes to make money, and dozens of other really important things about being an owner.

I Can’t Emphasize This Enough

Don’t ask franchisees how much profit you should be able to make as a franchisee…right out of the gate.

Instead, get to know them a little. Ask them questions that don’t have to do with money at first. Ease into it. Most of the time, franchisees will share their profit numbers. They’ll tell you if they’re making $100k a year. But again, you need to time your questions about franchise profit right.

A Few Profit Questions To Ask Franchise Owners

Here are some great questions to ask franchisees about profits and more.

1. How long did it take for you to break-even, and looking back, was there something you could have done to reach break-even faster?

2. If I buy this franchise, is an income of $100k a year possible? If so, how long do you think it will take to get there?

3. Who* are the most successful franchise owners in the system?

*Once you get the names, call them as part of your due diligence. Ask them what they do to be so darn successful!

4. What would be a quicker way to get to make $100k a year as a franchise owner of this concept?

5. What else I need to know about the business before I pull the trigger and become a franchise owner myself?

Franchise Profitability: One Size Doesn't Fit All

If you ask me how much you can make as a franchise owner of a specific franchise, I’m not going to be able to answer that question for you. At least not very well.

That’s because in franchising, one size doesn’t fit all. Store volumes are different. Margins are different. Business expenses can be different from one part of the country to another. There are just too many variables. Plus I rarely know profit numbers (although sometimes I do!).

In any event, you'll be able find out about franchise profitability if you do your research the right way. Remember, a lot of the information you'll be able to gather depends on how and when you ask about franchisee profits.

The bottom line?

The only way to found out if you can make $100k or more as a franchise owner is to ask the franchise owners.