Franchise Profit, How much can I make?

There are always 2 questions you need to get answered before buying a Franchise.

1. How much does it cost?

2. How much can I make?

The first one is easy to get answered, the Franchise Disclosure Documents will show this information and you can usually get that by completing a Franchise Application.

The 2nd one is a bit harder to get answered. On average only about 25% of the Franchises out there make an Earnings Claim in their FDD. Since Franchising is regulated by the FTC, this means the Franchisor can only discuss the numbers that are posted in their FDD.

Even then you have to be careful because the requirements are very vague when they do report an earnings claim, for example they may only report the top 30% of their stores. So this very well could be a skewed number.

Otherwise, the way you get this information is by talking to existing Franchise owners. They can tell you how much they are making. Now this does not mean you will make that much, it just tells you how much they are making.

Part of the Due Diligence process that we recommend at United Franchise Connection is to talk to at least 10 existing Franchise owners before making a decision. We also recommend calling until you find one that isn't happy and compare the attitude and answers from that person with some of the ones that are doing well. You will be surprised. Almost every time I talk to a Franchise owner that isn't doing well, I can immediately feel they have a poor attitude, but that is a different article!

Anyway, Due Diligence is the key.

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