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.
How long should it take to make my initial investment back?
Louise Harris writes:
The initial investment in a franchise varies greatly across the industry, but it’s one figure franchisees should have a clear handle on before buying in. Once known, a key question is how long will it take to make that investment back? Of course, it varies.
There are a few rules in franchising. The first is you must be able to make your investment back within the term of your franchise agreement. A five-year agreement, therefore, indicates a maximum of five years to recoup your initial investment.
That alone, however, is not necessarily very attractive, since this implies no profit in that time. Unless you’re a pilot franchisee - testing the initial model or its expansion beyond the home territory - you should ask the franchisor for evidence that it’s possible to achieve its projected income and profit. If it can’t provide this, you should ask the franchisees who are trading.
It’s fair to expect that the business may not break even in the first year, but beyond that, it will depend on the anticipated growth of the customer base, sales of the goods or service, capital expenditure required and costs.
Make sure you get under the skin of the financials before buying into the model, as it may not be for you.
You might also be interested in
I’ve received the franchise disclosure document. What are the questions I should ask the franchisor?
Answered by John Pratt
John Pratt writes: In the UK, there is no legal requirement for a franchisor to provide any... read more
I’m a franchisee with one brand, but I’m looking to invest in another. What should I tell my current franchisor – Am I duty-bound to inform them at all?
Answered by Louise Harris
Louise harris writes: It’s good to see a franchisee looking to expand – especially when they see... read more
I’m quite close to investing in a brand. How can I be certain that the expected revenue projections they’ve supplied me with are genuine?
Answered by Shelley Nadler
Shelley Nadler writes: There are many different ways in which franchisors present revenue projections. Franchisors may illustrate... read more
Answered by Alan Wilkinson
Alan Wilkinson writes: Franchise resales may come about for a number of reasons. Often a franchisee will... read more
Exciting Franchise Opportunities
Companies to Consider
Potential ROI within 18 months with an average net profit of 21%
60% bank funding, subject to status
Up to £230,000
£2,000+ per week (as per 2019)
£120,000 net profit
35% to 40% profit, depending on the business model
Concept Claims Solutions
Right at Home UK
Get expert franchising news delivered straight to your inbox
Franchise news, advice and new opportunities delivered weekly.
Must Read Articles
Added 2 years ago | 2 min read
Added 15 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