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.
In a five-year franchise agreement, typically how soon does a franchisee start to make a profit
Much does, of course, depend on how good the franchise, franchisor and franchisee are. Nevertheless, the reason the great majority of franchise agreements in the UK last for five years is that historically franchise owners have made a substantial loss in the first year - so you need to have sufficient working capital to allow you to trade through the loss making stage - make a small loss/break even in the second year, break even or make a small profit in the third year and are in substantial profit in years four and five.This timescale set out above is attractive to franchise owners, bearing in mind that they will be able renew their franchises at least once, provided they have not been in breach after the five-year term. In some franchises, such as McDonald’s or KFC, which involve very high initial expenditure, a longer term franchise agreement is offered to cater for the fact that it will take longer for the franchise owner to trade at a profit in view of the very high property costs that will have been incurred.
You might also be interested in
Answered by Mark Meyer
Mark Meyer writes: The pandemic has accelerated the trend commonly described as ‘the death of the high... read more
Answered by Shelley Nadler
Shelley Nadler writes: The law prohibits anticompetitive agreements that fix prices between businesses. A franchisee therefore controls... read more
Answered by Louise Harris
Louise Harris writes: The use of fixed fee versus percentage of turnover royalties (or management service fees)... read more
Answered by John Pratt
John Pratt writes: At the moment, nobody knows. Franchise agreements are all different, so the first thing... read more
Exciting Franchise Opportunities
Companies to Consider
Up to £230,000
Ask for more information
Expense Reduction Analysts...
Through major banks
Business Sales Plus
£14,000 per week
Multi-unit opportunities available
InHabit Property Franchising
Profit of £50,000-plus
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 one day ago | 2 min read
Added 2 days 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