Franchise ROI Calculator
Thinking of buying a franchise? Enter the franchise fee, setup cost, royalty and monthly costs to see your total investment, monthly profit, yearly ROI and payback period — then stress-test the numbers with the what-if revenue slider.
One-time investment
Monthly figures
What-if: revenue change
Franchise revenue rarely matches the brochure. Move the slider to see what happens if revenue is lower or higher than your estimate. Run the calculation first, then move the slider.
Due-diligence checklist
Before you sign or pay anything, work through this list. Franchisor sales claims are marketing — verify every important claim yourself.
- ✓ Visit at least 3 existing franchise outlets and speak privately with their owners about real sales and profit.
- ✓ Ask for audited financial records or tax filings — do not rely on brochure numbers alone.
- ✓ Read the full franchise agreement with a lawyer. Note the term length, renewal fees and exit conditions.
- ✓ Check whether the territory is exclusive. Ask what happens if the franchisor opens another outlet near yours.
- ✓ Confirm who owns the brand trademark and whether it is properly registered.
- ✓ List every fee: franchise fee, royalty, marketing contribution, renewal, transfer and training charges.
- ✓ Ask how you can sell or transfer the franchise later, and what approval or fees that needs.
- ✓ Check the franchisor track record: how many outlets closed in the last 2 years and why.
- ✓ Confirm what support you really get: training, staff hiring, supply chain, marketing and field visits.
- ✓ Compare with an independent business of the same type — the brand name must be worth the royalty.
Disclaimer: This is a planning estimate only, not financial advice. Real franchise results depend on location, management, market conditions and the franchisor. Consult a lawyer and an accountant before signing any agreement.
How to use
- Enter the franchise fee and your setup / interior cost.
- Enter expected monthly revenue and choose the royalty type (percent or fixed), then enter the royalty value.
- Enter monthly operating costs: rent, staff, utilities, stock and other costs.
- Press Calculate ROI to see total investment, monthly profit, yearly ROI and payback period.
- Move the what-if slider to test revenue 50% lower or higher and see how ROI and payback change.
Good to know
- A payback period under 3 years is usually considered healthy for small franchises; over 5 years is risky.
- Always run the -30% revenue scenario — if the franchise still survives there, it is a stronger deal.
- Include the marketing fund contribution and renewal fees in your costs; they are easy to forget.
- Your own salary is a cost too. If you work full time in the outlet, count a fair salary in operating costs.
Formulas: Total investment = Franchise fee + Setup cost. Monthly profit = Revenue - Royalty - Operating costs. Yearly ROI = (Monthly profit x 12 / Total investment) x 100. Payback = Total investment / Monthly profit.