Patrick Findaro here, Co-founder at Visa Franchise and Vetted Biz. If you’ve gone into franchise businesses and you thought, “Wow, this business is popular. I wonder how much the franchise owner is making from this business”. Or perhaps you’re actively investigating different franchise opportunities for you to buy and operate. And you need to know how much money franchise owners are making. Or what the franchise owner’s salary is in the first year, two years, three years; this blog is for you.
In this blog, I’m going to go through six ways that you can find out the franchise owner’s salary. As well as income for thousands of franchise brands.
Every franchise that’s recruiting franchise candidates under their system is required by the Federal Trade Commission to have a Franchise Disclosure Document.
58% of franchises will disclose their sales. thers will even disclose their franchisees’ earnings in aggregate or by individual units. That means an ice cream franchise that has one location in Irvine, California, could show sales and how much that owner earns in the business. Or they might just show the average numbers and or the median numbers. And it could be for all locations operating over 12 months or operating over 24 months. You have to see in the FDD in item 19 how the franchisor is breaking it down. That’s number one step to see if the franchisor is disclosing financials in their Item 19 of the FDD.
It reaches out directly to current as well as former franchisees. Understand from them how much money they’re making, or were they making with that franchise opportunity. And you can contact them directly through the information provided in the FDD or oftentimes the email, and phone numbers listed for that franchise executive to see how much money that they’re making in their franchise business.
We make it a little easier at Vetted Biz, so you could just go through on the franchise profile and see all the franchises at least disclosed in the most recent Franchise Disclosure Document. We’re contemplating even offering a service to facilitate those calls with franchisees as it can be a bit tough getting them on the phone, and you might even want to entice them, offer like Amazon gift card of $50, $100, $200. If you’ve reached out to numerous franchisees and you’re not getting any traction, you might need to entice them to get on the phone with you as I’m sure many of them are super busy and you’re not the top priority. But a nice $100, $200 Amazon gift card could do tthe trick.
Reddit is an online community where you have forums of all different types of communities, and you have a lot of investors, franchisees on Reddit.
You can just search on Reddit for that franchise brand that you’re actively investigating or you’re just curious about how much the franchise owner’s salary is. And just start asking or see if someone else has already asked. But it’s pretty collaborative Reddit, and that’s definitely a resource that you should tap into to see how much franchise owners are making in a franchise that you’re interested in.
Most people in the franchise ecosystem are using Glassdoor more for benchmarking employee salaries. But there are quite a few brands that have a decent amount of data points on how much the franchise owner’s salary and benefits are for, say UPS Store or College Pro Painters has 10 franchise owners that have self-reported their earnings. That’s a pretty good benchmark to see how much someone is making at College Pro Painters. Domino’s Pizza just has two, so it’s probably better to leverage information from the next data provider I’m going to mention.
They’re a resource mostly for the institutional investment community. Think hedge funds, private equity funds that are buying whole companies or investing a lot in publicly-traded stock. And franchisors are just a very small part of the type of work that Tegus is doing. But they have great coverage for some of the big brands like McDonald’s, Burger King, Pizza Hut, Planet Fitness, and emerging publicly-traded franchise F45 Training. They have interviews with franchisees as well as former executives of those brands. And a lot of times they go into the details of how much the owner’s making, and they talk to also multi-unit operators. It’s not just someone that has one location. But I’ve seen a lot of their interviews are with multi-unit operators of Domino’s or Pizza Hut that have four or five, six locations, and they’re going into to the numbers and they’re showing some great information.
Erik Van Horn had multiple franchise brands and multiple locations of franchise brands. He runs a franchise mastermind group, and he also has one of the largest franchise groups on Facebook. And you can check it out at Franchise Secrets. That’ll redirect you to the Facebook page.
There’s over 2,500 members, and people are pretty helpful. The questions will have a thread of 15 comments and people are sometimes citing right away in the Facebook group how much they’re making. And more often than not, it’s like, “Hey, send me a PM, send me a personal message and I’ll share with you more information on that franchise opportunity, how much that franchisee is making”.
Those are six resources that you can leverage when you’re curious or you need to know how much a franchise owner is making and what the salary and benefits add up to for all different types of franchise brands in the United States. I’m curious, I’ve gone through six resources to find information about franchise opportunities. If there’s one that I missed on this list, shoot me an email at firstname.lastname@example.org. I would love to investigate it for the listeners.