Free franchise economics tool
Franchise Investment ROI Calculator
Estimate the return on a franchise investment after startup costs, royalties, marketing fees, payroll, occupancy and other operating expenses.
Simple franchise ROI
Annual modelPrice the investment against annual owner economics
Initial investment
Annual unit economics
Annual fixed operating costs
Simple methodAnnual operating profit = revenue × gross margin − royalties − brand marketing fee − payroll − occupancy − other operating costs. ROI = annual operating profit ÷ total startup investment. Payback = startup investment ÷ annual operating profit. Break-even revenue uses the contribution margin remaining after gross margin, royalty and ad-fund percentages.
Advanced franchise ROI
10-year cash-flow modelModel financing, growth and exit economics
Startup investment
Debt financing
Year 1 revenue & variable economics
Year 1 fixed operating costs
Exit assumption
Advanced methodOwner equity = total startup investment − modeled loan proceeds. Each year projects revenue growth, gross profit, franchise/variable fees, fixed-cost growth, operating profit before debt, loan payments and owner cash flow. The final year can add a user-defined resale value based on operating profit, less selling costs and remaining loan balance. Returns are shown before income taxes and do not model tax depreciation.
Annual cash flow
Before owner income taxesFranchise economics by year
| Year | Revenue | Operating profit before debt | Debt service | Owner cash flow | Loan balance | Exit proceeds |
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Revenue sensitivity
All annual revenue levels scaledOwner return if revenue differs from plan
| Revenue scale | Year 1 revenue | Year 1 operating profit | Annualized return | Equity multiple | Year 1 DSCR |
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Gross-margin sensitivity
Other assumptions unchangedOwner return at different gross margins
| Gross margin | Year 1 operating profit | Break-even revenue | Annualized return | Equity multiple |
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Royalty sensitivity
Brand ad fund unchangedOwner return as royalty rate changes
| Royalty rate | Year 1 royalty | Year 1 operating profit | Annualized return | Equity multiple |
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Scope
Franchise returns depend on the actual disclosure and local unit economics
This calculator is a planning model, not an offer, franchise disclosure document analysis or investment recommendation. Actual franchise economics can differ materially because of territory, rent, labor, required remodels, transfer fees, technology fees, local advertising obligations, debt terms, taxes, owner compensation and other franchisor requirements. Use the actual franchise disclosure documents, contracts and local operating assumptions before committing capital.