FBR Issue 4 - 2021

The pet industry recorded impressive growth in the last
year and Pet Supplies Plus franchise owners have cashed
in on the popularity.
How We Selected The Most Profitable Franchises
While money isn’t everything, owning a business with a strong revenue model is
critical to any entrepreneur’s long-term success. Our selection criteria for choosing
this year’s 50 Most Profitable Franchises was very stringent. We started by
surveying nearly 25,000 franchisees representing over 200 leading franchise
companies. Our survey included 33 questions about business owner satisfaction, as
well as a number of demographic and income questions.
Next, we looked at average franchise owner incomes from our most recent research
data. While the median annual income for franchise business owners across all
industries is under $100,000 per year, we wanted a list of top franchise brands
that offered a better than average shot at building a six-figure income within a few
years. Investing in any business comes with risks, and your financial success is never
guaranteed. That said, we only selected brands that had at least 25 percent of their
franchise owners earning annual incomes of $150,000 or higher.
While business profitability and owner income are important factors, they don’t tell
the whole story. We wanted to also factor in return on investment or “ROI.” For this
step, we looked at the average startup investment required to open the business,
as businesses with a lower startup cost and more immediate income potential
offer a faster ROI for the business owner. While we didn’t eliminate franchises with
higher startup costs, businesses with lower startup costs and high-income potential
received a higher weighting in our scoring methodology.
Last, and most important, we looked at Franchise Owner Satisfaction. Our list had
to include highly profitable franchises, but also organizations with outstanding
franchise owner satisfaction. We know from our research that high satisfaction
drives high financial performance. Strong franchisor-franchisee relations are the
core of successful franchising.
In the end, we settled on 50 franchises that offer both a strong financial opportunity,
as well as extremely high satisfaction among their current franchise owners.
One final word on profitability…as mentioned earlier, money isn’t everything and
many people invest in franchise businesses for other reasons including lifestyle,
being their own boss, self-control of their future, passion for a new career, etc.
“We have found that the most successful franchisees aren’t driven by money but
by a passion for what they do. In other words, making money is a byproduct of
their passion and hard work. If you are simply chasing money as your primary driver
for becoming a business owner, the evidence suggests that franchise ownership
may not be the best fit for you,” said Eric Stites, founder and CEO of Franchise
Business Review.
INCREASED REVENUE
John Calabrese and his wife, Lori, own two
Express Employment Services in Utica and
Rome, New York. He agrees that the income
potential for any franchise is really up to the
franchise owner and how well he/she can sell
their product and services.
“It’s all about relationship building and
customer service in our business,” said
Calabrese whose franchise brand landed on
FBR’s Most Profitable Franchises List. “The
pandemic has been very challenging to deal
with, as new hiring came to pretty much a
complete stop in the middle of 2020. But
things are looking up now and we’re way over
where we were last year.”
“We’re about 60 percent higher in overall
revenue than we were a year ago,” Calabrese
said.
CONCLUSION
Exactly how much money you will make as
a franchise owner is a difficult question to
answer. There are many factors that will influence
your potential earnings—the biggest of
which include the brand you invest in and
your own personal performance as a business
owner.
When doing your research and business
planning, it’s also important to distinguish
between “business profit” and “owner income.”
Prospective franchisees often confuse a
business’s profits with their potential annual
income/salary, which is a big mistake. As a
business owner, before you can “pay yourself,”
you often have to pay business taxes, debt
repayments on loans, and reinvest in your business
(that new piece of equipment you need,
or the new signage you’re required to buy, for
example). While your business may grow to be
quite profitable, your actual take-home income
could be substantially lower.
No matter where you’re at in your journey
to franchise ownership, Franchise Business
Review recommends that you do your research
and due diligence before making the leap into
franchising. A great place to start your research
is our Top 200 Franchises, which are based on
reviews from the franchise owners, the real
experts.
For more information on the companies in this report, visit www.FranchiseBusinessReview.com | 17