It can be tempting to join a franchise that advertises high annual revenues, but be cautious. Before signing onto any franchise, it’s critical to do some digging to understand how much you can expect to earn. Do the research to determine your expected short- and long-term return on investment (the franchise ROI).
Why Understanding Franchise ROI Matters
Determining what you can expect to net after paying your initial startup costs helps you assess whether a company aligns with your current and future financial goals. Brands don’t typically disclose their ROI, so you’ll need to dig for it within franchisor documentation. Examine Item 19 of the Franchise Disclosure Document (FDD) to gauge franchise return on investment. You’ll also have to look carefully at other parts of the FDD to look for any additional costs, including franchise fees, startup costs, and monthly royalties. Note that these numbers don’t account for ongoing staffing or maintenance costs.
It’s not surprising that the franchises with strong financials are also the franchises that have the highest satisfaction ratings from their franchisees. Franchise Business Review surveys over 35,000 franchisees a year. Our research shows that owner satisfaction among FBR’s 2025 Franchisee Satisfaction Award winners averages 30% higher than other brands.
In fact, 85% of franchisees said they enjoy owning and operating their businesses. Additionally, 53% are considering buying additional units/locations, and nearly half (46%) report business revenue (gross sales) over $1M, while 26% report business revenue over $2 million.
So, if you’re looking to join a profitable franchise, franchisee satisfaction ratings should be a key consideration in your decision.
Ready to learn more? Check out our list of award winning franchises.
Franchise ROI Benchmarks by Industry
Many things play a role in a franchise’s ROI. For example, certain industries, such as home services, lend themselves to higher margins or greater scalability. In all cases, franchise owners who can manage their businesses efficiently tend to be the most profitable. The table below shows the typical ROI per industry; however, average annual ROIs also vary widely depending on brand, location, and other factors.
Typical ROI by Industry
| Industry | Average Annual ROI | Notes | Source |
| Food & Beverage | 4% – 10% | High competition and overhead; many owners earn under $50K/year | Franchise Business Review |
| Education & Tutoring | 10% – 20% | Lower overhead: demand for services can lead to higher margins | Mathnasium franchisees report an average annual revenue of $360,324, with an operating profit of approximately $115,743, yielding an ROI of about 32% |
| Health & Fitness | 10% – 15%+ | ROI varies by location and services | According to Exercise.com, The average gym profit margin is 10-15%, with franchise gym profits on the lower end of 10% and CrossFit gym profit margins in the 25-30% range. |
| Senior Care | 10% – 20% | Many senior care franchises operate without the need for expensive real estate or inventory | Source: Senior Care Authority |
| Home Services | 15% – 25% | Profits around 23.3% on $777K average revenue | Source: Sellbery |
| Retail | 5% – 12% | Wide variation depending on product mix and location |
High-ROI Franchise Categories (with Real-World Examples)
While you want a good return on your investment, it’s also important to choose a franchise that aligns with your interests and values. If you’re just starting to consider franchise ownership, our Franchise Vision Plan tool can help you define your personal and business goals and clarify your vision for business ownership.
Let’s explore some of the sectors with the best franchise return on investment.
Home Services Franchise ROI (15-25 %)
Franchises specializing in home services offer a range of services, including house cleaning, home renovations, pest removal, and junk removal. These opportunities rise to the top because they meet the needs of people who want practical and trustworthy solutions from brands they know and trust.
Home services franchises typically don’t require a physical storefront and offer flexibility. If you want to work on your own schedule, save on costs, and work from home, owning a home services franchise might be the right fit for you.
Often, people seeking a plumber need someone they can rely on to fix a problem quickly. The Mr. Rooter® Plumbing franchise has been in business since 1972, and is part of the NeighborlyⓇ franchise umbrella, which also includes Mr. Appliance and Mr. Handyman.
Although they don’t state their ROI, the average gross sales for a Mr. Rooter franchise are approximately $1.27 million per location.
- Min. Cash Required: $50,000
- Net Worth Required: 75,000
- Total Startup Investment: $83,100 – $225,390
Education & Tutoring Franchise ROI (10-20 %)
If learning is one of your core values, investing in an education or tutoring franchise could yield positive returns.
Tutoring and education franchises tend to have higher ROIs because they don’t need prime retail space or large storefronts. They often operate in smaller offices, shared spaces, or even virtually (e.g., online tutoring). Tutoring centers have even lower staffing costs, as centers frequently hire part-time instructors, giving them flexibility in labor costs.
The Learning Experience Center (TLE) franchisees are not only profitable but also receive 4-star franchisee satisfaction ratings year after year from their franchise owners. The brand specializes in providing preschool through kindergarten daycare and early education services.
The average gross sales for a TLE franchise are approximately $2.04 million per location. There is no publicly available ROI report for TLE. To calculate ROI, you’d also need to consider total investment costs, which can exceed $650,000, depending on the type of build-out and development model.
- Minimum Cash Required: $150,000
- Total Startup Investment: $650,000 – $700,000
- Net Worth Required: $400,000
Health & Fitness Franchise ROI (10-15+ %)
Health and fitness franchises often deliver high ROI because they combine predictable recurring revenue with lean operating costs, supported by a popular demand for wellness services. Gym franchises typically report ROIs in the 10–15% range, but unique fitness concepts can earn more.
For example, i9 Sports franchises may appeal to business owners interested in bringing organized youth sports to their communities. As the nation’s first and largest youth sports league franchise, i9 Sports offers a proven business model focused on fun, safety, and convenience for families.
With little overhead and a low barrier to entry, i9 Sports franchise owners have the opportunity to score big ROIs through registrations, sponsorships, concessions, and merchandise sales.
- Min. Cash Required: $50,000
- Net Worth Required: $50,000
- Total Startup Investment:$44,900 – $69,900
Lower-ROI, Higher-Stability Franchise Industries
Some franchise sectors may have lower ROIs, but instead offer predictability and consistent demand. Sectors such as food and beverage, retail, and senior care typically yield ROI in the 4%–12% range. While your margins may be a bit lower on average, you may prefer the stable revenue streams and resilience these businesses offer in economic downturns.
Food & Beverage Franchise ROI (4-10%)
According to a 2025 National Restaurant Association Report, full-service restaurants reported a median income before taxes of 2.8% of sales, while limited-service restaurants reported a median income before taxes of 4%.
However, the following two food and beverage companies made our 2025 list of Most Profitable Franchises. Because beverage and light-food menus typically have lower food costs compared to burgers or pizza chains, these two brands offer franchise owners higher potential ROI.
Founded in 2002, Ellianos Coffee sells premium coffee products. With low startup costs, comprehensive support, and strong market demand, franchise owners can build a rewarding business that offers flexibility.
According to the FDD (as summarized by SharpSheets), the brand’s average annual revenue per franchise is about $1,127,000 per year, compared to other brands that report average annual revenues estimated at around $604,000.
- Min Cash Required: $150,000
- Net Worth Required: $500,000
- Total Startup Investment: $671,500 – $1,068,700
Tropical Smoothie Café provides in-line traditional locations, end-cap locations with and without drive-throughs, freestanding locations, and non-traditional locations. According to its website, Tropical Smoothie Cafe reported $1,005,063 system-wide average net revenues (not profits), with 562 of 1,268 (44%) restaurants attaining or surpassing this figure. This was based on the fiscal year ending December 2024 and included 1,268 restaurants that were open for at least a year prior.
- Min. Cash Required: $175,000
- Net Worth Required: $350,000
- Total Startup Investment: $300,000 – $720,500
Retail Franchise ROI (5-12%)
Retail franchises typically deliver lower ROIs because they come with high fixed costs in the form of leases, build-out requirements, staffing, and inventory. Margins are often thin due to competition and price sensitivity. As a result, retail franchises tend to appeal more to entrepreneurs who value stability, brand recognition, and steady consumer demand over quick returns.
FASTSIGNS International, Inc. is the leading sign and visual communications franchisor in North America, and is the worldwide franchisor of more than 775 independently owned and operated FASTSIGNS® centers in seven countries. According to its website, a franchise owner in the top quartile can expect a 32.5% return, while average owners can see returns as high as 20%. With average centers reporting $1.1 million in revenue, a 20% return equals $220,000.
- Min. Cash Required: $80,000
- Net Worth Required: $300,000
- Total Startup Investment: $215,194 – $377,334
Uptown Cheapskate is redefining clothing resale, giving customers a boutique-style experience and value. Customers can turn their gently worn clothing into cash, and shoppers can get great bargains on designer brands. According to the company’s website, owners earned an average net income of $188,000 based on average annual gross sales of $1.3 million.
- Min. Cash Required: $100,000
- Net Worth Required: $200,000
- Total Startup Investment: $328,002 – $596,502
Senior Care Franchise ROI (10-20%)
Baby Boomers are aging, and most of them would prefer to stay at home rather than move to assisted living facilities. This creates a strong demand for franchises that provide companionship and caregiving services for seniors. If you have a people-first mindset and excel at building relationships with caregivers and families, senior care may be the ideal sector for you.
Founded in 1995, Right at Home provides in-home care services to help seniors and individuals with disabilities maintain as much independence and dignity as possible. Currently in over 700 locations, Right at Home is one of the largest home care franchises in the world.
According to the Right At Home website, for individual franchise owners, a select group of units in 2024 reported an average annual net billing per office is over $1.7 million, with a 44.43% profit margin.
- Min. Cash Required :$150,000
- Net Worth Required: $750,000
- Total Startup Investment: $92,100 – $165,309
Tips for Finding the Best Franchise for You
The best company to invest in isn’t always the one with the highest franchise ROI. As you evaluate different sectors and brands, look at the following factors.
- Consider Support and Satisfaction. Choose franchise systems known for robust training, ongoing support, and high franchisee satisfaction These tend to perform better long-term. All of the brands on our list of the Top Franchises have been independently verified as having above average ratings from franchisees in these areas.
- Assess Scalability. Will the franchise model allow you to expand and potentially add territories or stores? Multiple units can dramatically boost your ROI.
- Account for Industry-Specific Costs. Different sectors have cost drivers that ultimately affect profitability. (For example, real estate costs affect ROI in the food and beverage industry, while staffing can affect profitability in the home services industry.)
- Conduct Your Own Research. Speak with current and former franchise owners to gather their insights on financial challenges, any hidden costs, and their overall satisfaction with the company. Check out our podcast geared towards folks considering franchise ownership. We’re here to help.
Deciding to invest in a franchise is no small feat, but gathering knowledge is the first step. Start your journey today with FBR Franchise Academy! Get tips, insights, and support to help you get started on your franchising journey.
