Franchise return on investment
The ratio between the net profit generated by franchise operations and the total investment made by the franchisee: entry fee, fit-out costs, equipment, and working capital. Usually expressed as a payback period in years or as an annual percentage return.
In practice
The average payback period in French franchising is 3 to 7 years depending on sector and initial investment. In foodservice, total investment often exceeds 200,000 euros with a 5 to 6 year return. In personal services, investment can be below 30,000 euros with a 2 to 3 year return. Any prospective franchisee should build their own financial forecast from real data provided by the franchisor and validated through conversations with existing franchisees.