The franchise business will contact you by means of email and/ or telephone only to the email address and phone number you have provided.
By submitting the enquiry form you are consenting to send your personal information to the selected franchise business.
You also agree to receive further newsletter email marketing from What Franchise.
At what point during a five-year franchise agreement should I expect to recoup my investment?
This will vary, depending on the nature of the franchise you’re taking on.
A low cost business could return its investment and start making profits within a few months, certainly within the first year. A premises-based business, which also requires fitting out and employing staff, will take longer.
Indeed, the latter may require an initial term longer than five years to satisfy both yourself and your lenders that the investment will be returned before there’s a risk that the rights to operate the franchise will end.
The way to calculate the time in any particular case is to prepare a detailed financial and funding plan for the outlet in question. This can be done with the help of the franchisor, its recommended consultants or your own accountants, but the majority of the information should come from previous openings. You may even want to check the assumptions with existing franchisees, who have been through the process in practice.
Remember too that it’s not just when the investment will be recouped that’s important. You will also need a cash flow forecast to make sure you have sufficient working capital available to ensure the business can continue trading until that happy day comes along.
Brian Duckett is chairman of The Franchising Centre, part of the world’s largest network of specialist franchise consultants.
You might also be interested in
Will a franchisor tailor its initial training to me or will it only provide set instruction that covers all aspects of the business?
Answered by Alan Wilkinson
Alan Wilkinson writes: When a franchisor recruits franchisees, it will have a set profile of the type... read more
Answered by John Pratt
John Pratt writes: There may be none if you’re not suited to dealing with businesses. Many people like... read more
Answered by Louise Harris
Louise Harris writes: Not all franchises are based on territories. Some may be split into business sectors,... read more
Answered by Renata Selley
Renata Selley writes: Your ‘year-end’ is the date when your franchise accounting period ends. Communication is king... read more
Exciting Franchise Opportunities
Companies to Consider
Jackson Fire & Security
Franchise can be in profit in year two, with net profits rising from 7% to 40% on maturity
Ask for more information
£14,000 per week
Multi-unit opportunities available
Up to £230,000
£120,000 net profit
Footlights Theatre School &...
Get expert franchising news delivered straight to your inbox
Franchise news, advice and new opportunities delivered weekly.
Must Read Articles
Added one year ago | 2 min read
Added 16 hours ago | 2 min read
Added one day ago | 2 min read
Find your next business opportunity
Search 100s of UK franchises and become your own boss today.
What Franchise Newsletter
Keep up to date with all the industry news