How Much Income Can You Earn?The median income for franchise business owners ranges between $75,000 and $125,000 per year. 30% of the owners make in excess of $150,000 per year.
It is that reason many companies do not provide specific earnings claims. Many of the deciding factors on how much profit is being generated is in the hands of the owner, not the franchisor. So how are you to know if a business you are investigating is a good investment and will provide the income you need to support yourself and your family? The good news is there are ways to find and validate that information. If a business is franchised there are very rigorous reporting and disclosure requirements mandated by the U.S. Government and the information is required to be up to date. That’s good news for you. The franchise is required to put out a Uniform Franchise Offering Circular (UFOC). All UFOC’s follow a standard format with 23 sections or “Items.” Item 19 in all UFOC’s is “Earnings Claims.” If the company you are investigating provides earnings claims or earnings guidance, this is where that information will be found. But as we said before, not all companies provide detailed earnings claims and the government does not require them to even though there is a section for it in the UFOC. If you don’t find your answers in Item 19, the UFOC’s are also required to list all current and past owners of the business, complete with full contact information. A good place to investigate if you ask me. You are free to contact any and all current and past owners. These are all independent business people who went through the same process you are going through and they are the best place to validate not only P&L but everything else you might want to know about owning that particular business.
Finding the answers you need to make an informed decision about which business is right for you will take some investigation. The-Franchise-Investigator is dedicated to being your best place to start.
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How much money will the business earn for you is one of the most asked questions when someone is investigating business opportunities. Keep in mind you will be a business owner, not an employee with a guaranteed salary. The profit and loss (P&L) will depend on how well you run your company. Results vary from owner to owner based on a number of factors.
How much money you will make also involves some simple math. It all starts with top line revenue. You will be able to find the range of top line revenue the business is generating either from the company, in the UFOC, or by talking to the current and past owners. It now comes to how much net margin can you squeeze out of the top line revenue. You will find these margins can range between 10%-30% and higher in certain businesses. So if a business has top line revenue of $400,000 and you figure a 15% net margin rate, then that equates to a benefit to the owner of $60,000. A business that generates $600,000 in revenue with at 25% net margin would yield a benefit of $150,000. You get the 
idea, find the ranges, do the math, and you'll have a pretty good idea what kind of income you can make.