by Abigail Mitchell
Can a franchise offer financial security? How much do franchise owners make varies by franchise type, location, industry, brand, and skills, but it can offer a stable, profitable source of earnings. Learn more about franchise earnings to help determine if franchising is right for you.
How Do Franchise Owners Get Paid?
A franchise owner’s primary source of revenue is generated from the sales of products or services. Franchise owners receive profits after covering operating expenses, including labor, rent, utilities, and franchise fees. The average annual income for a franchise owner with a business open for 2-10 years is $130,000, according to a survey of 35,000 franchisees across 375 leading brands conducted by Franchise Business Review. The average annual income for a franchisee with a business open for more than 10 years is $177,240.
While franchise ownership can be lucrative, it’s essential to understand the monthly expenses associated with running a franchise. Some common costs include:
- Franchise fees: Regular fees paid to the franchisor for the right to operate under their brand.
- Royalty fees: Ongoing payments to the franchisor based on a pre-determined percentage of sales revenue.
- Operating costs: Expenses like rent, utilities, payroll, and supplies.
- Marketing and advertising: Investments in marketing efforts to attract and retain customers.
- Employee salaries: Payroll for your staff members.
- Taxes: You’ll be required to pay taxes as part of doing business, but you can also take advantage of tax deductions to cut costs.
The franchise disclosure document (FDD) is a detailed resource that can answer questions like how much do franchise owners make. Some FDDs include an Item 19, which discloses the financial performance of some existing franchise units to help you get a better sense of the terms of the franchise agreement and your potential earnings. To fund your franchise, you’ll need to rely on your savings, a business loan, franchisor financing, retirement funds, or an investor.
Factors Affecting Franchise Earnings
The earnings of franchise owners can vary widely based on several factors. Location, franchise type, industry, brand reputation, and the skills and dedication of the owner all play a role in determining income. While there is no one-size-fits-all answer to how much franchise owners make, understanding the key factors influencing franchise owner salaries is helpful.
- Location: Your franchise’s location can significantly impact income. High-cost urban areas may offer higher revenue potential but also come with increased operating costs.
- Franchise type: Different franchise types, such as fast-food restaurants, coffee shops, or retail stores, have varying earning potential.
- Industry: Some industries, like the coffee franchise sector, have consistent demand, making them more stable income generators.
- Brand: Reputable and well-known franchise brands tend to attract more customers, increasing sales and earnings.
- Business acumen: Your commitment, management skills, and ability to follow the franchise system can influence profitability.
Current Events Fuel Entrepreneurship
Despite cooling inflation, 67% of employees said the cost of living is outpacing salary growth, and 64% are stressed about their finances, according to a Bank of America survey on CNN. People are turning to entrepreneurship to achieve financial freedom and self-sufficiency. At least 19% of working-aged adults are in the process of starting or running a new business, and 71% were spurred to launch a business to generate “great wealth or high income,” according to the Global Entrepreneurship Monitor, an annual report by Babson College.
As a business owner, you have the freedom to make decisions and shape the direction of your business. You can create a work-life balance that suits your needs and lifestyle. Successful businesses can also provide substantial income potential, financial security, and a legacy for future generations.
But, entrepreneurship can be risky. Babson College reports 5.2% of businesses closed in 2022, up from 2.9% in 2019. Franchising can minimize some risks associated with starting a business from scratch by providing a turnkey operation with training and ongoing support. Established brands like Beans & Brews Coffeehouse offer an excellent opportunity for aspiring entrepreneurs in the coffee franchise industry.
The Appeal of Coffee Franchise Opportunities
As you consider the prospect of franchise ownership and explore how much franchise owners make, coffee franchise opportunities stand out as a compelling choice. U.S. consumers spent nearly $110 billion on coffee and related goods in 2022, according to the National Coffee Association (NCA). The NCA report also noted that approximately 63% of American adults chose coffee each day — more than any other beverage, including tap or bottled water. The coffee industry maintains consistent demand, making it a stable and potentially profitable sector to explore.
Beans & Brews Coffeehouse: A Competitive Advantage
Beans & Brews Coffeehouse offers an appealing path to entrepreneurship, backed by a strong brand and consistent demand. Since our first location opened in 1993, we’ve established ourselves as a prominent player in the coffee franchise industry. We have locations in Utah, Idaho, Arizona, and Nevada, and recently debuted our first coffeehouse in Texas. We have available franchise territories nationwide for qualified investors.
Our high-altitude roasted coffee is known for its exceptional quality and taste, attracting a loyal customer base. We also offer teas, energy drinks, and a flavorful food menu. Our reputation and strong customer loyalty contribute to increased foot traffic and sales. We don’t just brew coffee; we create community by cultivating a positive and inviting atmosphere.
We offer two main models: a standard model with lobby and drive-thru, as well as an express model. The coffee franchise cost is $518,500 to $761,500. It covers various expenses such as the franchise fee, leasehold improvements, equipment, inventory, and working capital. We strive to ensure our franchise candidates have a solid grasp of the financial commitments to get started.
We strive to go above and beyond to assist new owners in building successful coffeehouse businesses. Our franchisees receive comprehensive training and ongoing support from the Beans & Brews team, ensuring you have the tools and knowledge to thrive. Our training covers all aspects of coffee preparation, customer service, store management, and marketing strategies.
Additionally, you’ll receive ongoing support, including regular visits from field representatives, operational guidance, and access to a network of experienced franchisees who can share insights and best practices. We’re dedicated to helping franchise owners navigate the challenges of entrepreneurship and equip them with the tools and knowledge needed to thrive in the competitive coffee industry.
Join the Beans & Brews Family!
Connect with someone from our franchise team to learn how launching a Beans & Brews Coffeehouse can help you diversify your portfolio and provide the income you desire. Get started in the coffee industry today!
