How Do Franchise Owners Get Paid & Other Questions About Franchise Finances

How Do Franchise Owners Get Paid & Other Questions About Franchise Finances

How do franchise owners get paid? Understanding how franchise owners are compensated, the difference between income and revenue, and the management of franchise fees are key components to grasping the full picture of franchise economics.

Understanding Franchise Finances

Franchising blends entrepreneurial independence and support, making it an attractive path for many aspiring business owners. Franchises can leverage established customer bases and benefit from national marketing campaigns. Whether you're looking to use your transferrable skills in a new industry or aiming to become your own boss with the backing of a reputable brand, opening a franchise could be a strategic step towards achieving your entrepreneurial goals.

Starting a franchise requires a comprehensive financial commitment. Your initial franchise cost covers franchise fees, startup costs, and capital reserves. The question of how franchise owners get paid depends on a lot of variables. Once you open your business, your income is typically derived from its profits, which are influenced by sales, cost management, and the efficient operation of the franchise. Profitability is also impacted by market conditions and your ability to drive the business forward.

The journey from investment to profitability varies widely in franchising. It's essential to recognize that franchise income — your take-home pay — and franchise revenue — your total income before expenses — are distinct financial concepts. Understanding the difference helps you manage expectations and set realistic financial goals.

You’ll also have to navigate various fees, including ongoing royalty and marketing fees, which are typically a percentage of the revenue. The fees contribute to the franchisor's support services and brand marketing efforts. Employee salaries, another significant expense, are paid from your operational budget, which is funded by the revenue generated from sales. The franchise disclosure document (FDD) provides details of both the franchise cost and franchise agreement.

Premium Service Brands: Raising the Bar in Franchising

Premium Service Brands (PSB) stands out in the franchising industry for our comprehensive support system, including training, marketing, and a strong brand presence. We’re the franchisor of nine home services brands, including Window Gang, 360° Painting, and The Grout Medic, and have decades of experience helping entrepreneurs navigate the financial challenges of launching a small business.

Our culture is steeped in honesty, integrity, and respect — values that resonate deeply with customers and franchisees alike. PSB’s culture, combined with robust training and support, positions our franchise owners for potential success, providing a competitive edge in the thriving home services market.

Recent statistics from the National Association of Realtors show a 1.1% increase in pending home sales in September, indicating a steady demand in the housing market, which historically correlates to the strength of the home services industry. The Joint Center for Housing Studies of Harvard University forecasts a $452 billion expenditure in home remodeling over the next year. Despite a projected dip in early 2024, the latter half of the year looks promising for the home services sector, suggesting a ripe opportunity for franchises in this industry.

For an initial investment of $45,075 to $148,600, you can build a path to a better future. We recently reached a new milestone by adding 46 new locations during the third quarter. Success stories abound within the PSB family, underscoring the potential for financial and personal success.

"I was an elementary school teacher and was ready for a career change. My husband and I have built our location into a successful company with eight crews,” says Sunny Thayer, franchise co-owner of Window Gang Palm Beach, Florida. “It's been an exciting career path with challenges and rewards, both financially and professionally."

Learn More About PSB

Now that you have a clearer understanding of the financial mechanisms at play, get started to take the next step in your franchising journey and explore our home services opportunities.