Future Bet – Deconstructing the Franchise Roi

Listen to Holly A Ford’s Segment on Pillars of Franchising 11/28/18

Among the Key Performance Indicators when determining if a business is a good investment is the critical ROI.

Franchise Return on investment (franchise ROI) is a financial ratio used to calculate the benefit an investor will receive in relation to their investment cost. It is a percentage that is most commonly measured as franchise Earnings (net income) – franchise Cost (the original cost of the investment) divided by franchise Cost.

Franchise ROI = (Earnings-Cost)/Cost

Franchise ROI should never be overlooked when buying a business.  Determine what your goals are and assess business opportunities to find the best ones to meet your goals. For example, Fred and Ray decide to buy a franchise resale from Zarian Firm.  They are looking to be in the business for just 4 years and would like an franchise ROI of 40% to buy a new Batmobile.  They have 200,000 to invest. Ray and Fred need a business that has a net profit of $70,000 a year to achieve their goal. Can they do it?  Stay tuned.

Listen to my segment on Pillars of Franchising 11/28/18 to learn more.

Holly A Ford


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