Looking at the five biggest names in food franchises today, examine how much money owners make, and then compare food franchise income to other popular industries like beauty, cleaning, elderly care, human resources, and more. In the end, you will uncover two franchises that can generate as much or more than some of the great food franchises, for an investment that is 0 times less!
Everyone thinks they want to own a grocery franchise. They believe grocery franchise owners make the most money, but according to a Franchise Business Review report, 51.5 percent of grocery franchises make less than $50,000 a year in profits and only about 7 percent of food franchises have profits greater than $250,000. The average profit of all restaurants in the report was $82,033.
As you can see, few grocery franchises have high income and many owners are struggling or have just bought a job. It is very likely that they will get “junk” regarding the territory. In most situations, the homeowners who make the most money are the places that opened long ago and got the best areas.
Average Income of Top 5 Franchises in USA
Many new franchisees will invest in trusted brands. Using data from Franchise City, let us see how long these business owners can expect to open these famous franchise stores.
These restaurants will flourish wherever they open, but they are all subject to the strict licensing standards of franchise rights. Chick-fil-A only opens approximately 100 restaurants each year. The intermediate sites generate 4.16 million U.S. dollars in revenue, and the owner earns approximately 200,000 U.S. dollars per year.
Starting a McDonald’s is not difficult in terms of standards, but it is very difficult in terms of cost. It will cost more than one million dollars to build a site, and you will have to find and pay for real estate. However, given the high demand for the brand, McDonald’s franchise is a safe investment. It generates approximately 2.8 million U.S. dollars in revenue, and the owner earns approximately 150,000 U.S. dollars per year.
No matter where you find McDonald’s, you will often find Burger King alongside and not far away. This franchise is a wise investment, but the cost of acquiring it is between US $2 million and US $3 million. Fortunately, most of these restaurants can generate enough income to offset this initial investment. On average, Burger King generates approximately $1.4 million in sales and approximately $85,000 in franchise profits each year.
When you think of sweets and wine, do you think of Dunkin’ Donuts? The brand offers a variety of franchise options, including managing buildings, independent locations, and small businesses in existing structures. The cost of the franchise ranges from USD 465,000 to USD 1.6 million. Dunkin Donuts has an average sale of approximately USD 1 million, resulting in a profit of USD 100,000.
In recent years, as the sandwich brand strives to remain competitive, starting a Subway franchise has been a risky adventure. The average starting price for each location is close to $235,000, but the expected revenue is much lower than most other franchises. In addition, hundreds of facilities have recently closed, indicating that demand may fall. The average revenue of the Subway franchise is approximately US $400,000, and the average profit is approximately US $41,000 per year.
Factors Affecting Franchise Owner’s Earnings
Obviously, determining your income as a potential franchisee can be a daunting task. In fact, two franchise owners are unlikely to do the same thing and earn the same amount for a given year. Factors that affect franchise owner’s profitability include:
Owner’s Business Experience
One of the main benefits of buying a franchise is that you can benefit from the franchise’s experience, guidance and leadership. However, like any business, your professional ethics and business knowledge have a major impact on your success. The more knowledgeable and hard-working you are, the better your chances of becoming a successful small business owner.
When purchasing a franchise, the franchisee may advise you on how to control inventory to minimize inventory costs, meet customer needs, and ensure proper inventory turnover. However, your income may also depend on your ability to minimize costs. By working hard to minimize operating costs without compromising service quality, you can get more profits from your business.
As far as you benefit from the loyalty of the franchisor’s customer base, you must also do your part to win them back by hiring professional, experienced and qualified people who can provide quality products and run the business correctly.
Are All Franchise Owners Successful?
Franchise opportunities may try to portray franchise as an opportunity to make easy money or become your own boss, but according to Sean Kelly of UnhappyFranchisee.com, some franchises have interest rates as high as 90 percent, but these franchises may not tell you.
The truth is that starting a franchise is as successful as starting a small business. How successful is the small business? For every 100 franchise businesses, 80 will survive the first year, 28 will survive its fifth year, and only eight or nine will survive the first ten years.
Like any investment, franchising involves risks. Therefore, although franchisees use a variety of powerful language and subtleties to attract potential franchisees, it is always important to conduct research before investing in this business.
The bottom line is that buying a franchise business might look like a piece of cake in the beginning, but as soon as it crosses its first year, there are dozens of potential risks and burden of reputation building, all upon the franchise owner.
It is essential to do proper research along with knowledge about the industry and statistics of the competitor’s business in order to survive longer in the franchise business and be profitable at the end. If you are lucky, you might earn loads of cash and live the real American dream!