Will A Franchise Increase Your Income? The Truth About Franchising!

According to a study by Dr. Timothy Bates, a professor at Wayne State University in Detroit, found that the franchise failure rate actually exceeded 30 percent and that franchises made lower profits than independent entrepreneurs. Dr. Bates' study also found that the average capital investment of franchisees was $500,000 compared to $100,000 for independent entrepreneurs. Many franchisees never make much money. Average profitability is poor, especially after taking into account the purchase price of the franchise. So take the hype used to sell franchises with a big pinch of salt!

Will A Franchise Increase Your Income?

McDonalds
Investment
- Total Investment: $506K-1.63MM
Fees
- Initial Franchise Fee: $45K
- On-Going Royalty: 12.5%
- Advertising Fee: 4%

Quiznos Subs
Investment
- Minimum Net Worth: $125K
- Cash Investment: $70K
- Total Investment: $193-257K
Fees
- Initial Franchise Fee: $25K
- On-Going Royalty: 7%
- Advertising Fee: 4%

Baskin Robbins - 31 Flavors
Investment
- Minimum Net Worth: $400K/Unit
- Cash Investment: $145.8-527.8K
- Total Investment: $145.7-527.8K
Fees
- Initial Franchise Fee: $40K
- Average Franchise Fee: $40K
- On-Going Royalty: 5-5.9%
Advertising Fee: 5%

Will A Franchise Increase Your Income?

I have experienced many of the common problems associated with starting and owning a franchise.

Starting the franchise was a long and expensive process. The start up fees were close to $350K. I had to borrow from family and take out a business loan. By the time we opened the doors it had been well over a year.

After opening the doors my expenses (payroll, advertising, rent, electricity, franchise fees, etc.) exceeded my gross revenue, leaving me unable to pay myself. I was working 80+ hours a week with no income. After 6 months of falling further into debt I was forced to take out a personal loan to pay my living expenses.

I was eventually forced to foreclose on my franchise and take a huge financial loss.

Since this experience I have discovered the Direct Sales Industy. With Direct Sales I keep 70% of my income compared to 20%-30% usually experienced with traditional franchise businesses. This is possible due to low overhead costs. I have no employees, rent, or franchise fees. All I need is my computer, phone, and an internet connection. This Business has allowed me to work 3-4 hrs/ day, given me freedom to spend with friends and family, and allowed me to enjoy a high income lifestyle.

Will A Franchise Increase Your Income?