Most franchise buyers focus on gross revenue. This calculator shows you what really matters: your net profit after every fee, royalty, and cost.
Enter your numbers below to see your real take-home pay after all franchise costs.
Based on the numbers you provided, here's what you can expect. All figures are pre-tax estimates.
Our FDD Deep Dive Guide walks you through the 12 red flags most franchise buyers miss, and how to decode the financial performance data before you sign.
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Book a Free Discovery CallThis is the first question every prospective franchise buyer asks, and the franchise industry does a surprisingly good job of not answering it clearly. A Franchise Business Review survey of nearly 38,000 franchisees found that the average franchise owner earns about $103,000 per year. But that average is misleading because it lumps everyone together.
Quick-service restaurant franchise owners often operate on razor-thin margins of 6% to 9%. On $800,000 in annual revenue, that means you might clear $48,000 to $72,000 before personal taxes. Service-based franchises (cleaning, home repair, consulting) tend to do better, with margins in the 10% to 20% range, mainly because they carry less overhead and don't have inventory eating into profits.
The difference between franchise owners who make good money and those who struggle almost always comes down to one thing: understanding the fee structure before signing. Royalty fees typically run 4% to 12% of gross revenue, with the industry average sitting around 6.7%. But royalties are just the beginning.
On top of that, most franchise agreements include a marketing or advertising fund contribution of 1% to 4%, technology and system fees of $200 to $500 per month, and mandatory vendor purchasing requirements that can cost 5% to 10% more than sourcing independently (and up to 30% in some systems). Stack all of these together and a franchise generating $500,000 in revenue might only produce $40,000 to $70,000 in actual owner take-home pay.
The Franchise Disclosure Document is the single most important document you'll review before investing. Item 19, the Financial Performance Representation, is where franchisors can share revenue, expense, or profit data from existing locations. According to the 2024 Annual Franchise Development Report, about 86% of franchisors now include Item 19. That's a big jump from just 20% back in 1995. The catch? Most only show revenue numbers. Very few break out actual expenses or profit margins.
That gap is exactly why tools like this calculator exist. By plugging in realistic operating costs alongside the franchise fee structure, you get a much clearer picture than what most franchise sales presentations will ever show you.
The franchise owners who consistently earn above-average returns tend to do three things differently. First, they negotiate before signing. Franchise fees, territory size, and vendor requirements are more flexible than most buyers realize. Second, they build real operational systems that reduce waste and keep labor costs under control. Third, they find ways to diversify revenue within their franchise model, adding services or products that carry better margins than the core offering.
Building those kinds of operational systems is exactly what separates franchise-grade businesses from everyone else. It's not the brand that creates the value. It's the system behind it.
Disclaimer: All figures shown are pre-tax estimates. Your actual take-home will be lower after federal, state, and local income taxes, which vary based on your filing status, entity structure, and deductions. This calculator provides estimates for informational purposes only and should not be considered financial, legal, or investment advice. Actual franchise profitability depends on many factors not captured here, including location, management, local market conditions, and the specific terms of your franchise agreement. Always consult a qualified financial advisor and franchise attorney before making any investment decision.
Data sources: Franchise Business Review 2023 Franchisee Compensation Study (38,000+ respondents), 2024 Annual Franchise Development Report (Franchise Update Media), U.S. Small Business Administration Franchise Fee Guidelines, FranConnect Industry Benchmarks, and Toast Restaurant Industry Report. Self-employment tax calculated per IRS Schedule SE guidelines.