How much do the franchise partner get at?

Question

Starbucks? or Second Cup?...etc? these places make? at least around? yearly salary in these places?

I am curious! THNKS1 xD

Answer 1

I've never heard of Second Cup.  Starbucks isn't franchised.  It's all corporate owned.

There are many variables into figuring what you'll net as a franchisee.  It depends on your costs.  First, you have look into what the franchisor charges you to use their name and brand.  

For example let's say you pay royalties of 8% of gross sales and 4% for corporate ad budget.  So, that's 8+4=12% off your gross sales paid to the franchisor.  Continuing with the example, let's say your costs of goods are 30% and your labor is also at 30% of gross sales.  And your occupancy costs (rent) are at 9%.  Now, we're at 81% for costs.  Let's say utilities, phone, alarm, etc. is in there too.  So, just for this example let's say your costs run you about 85-90% of gross sales.  What's left over?  10-15% is left over for you.  

Therefore, if you sold $200,000 worth of coffee and pastries or whatever in a year and you make 10-15% then you made about $20-$30,000 in a year.  That's for one store.  If you get 5 stores with the same costs then it's $100-$150,000/yr.

This is a very rough example.  If you're a great operator and run a tight ship you could net 20% for yourself.  The trick is to keep your costs down as much as possible (the costs you can control, i.e. food and labor).  Your costs can be totally different from what I've explained here, but hopefully this can give you an idea.

Answer 2

Franchises are created through a "Parent Company", i.e., Starbucks, etc. for a determined "fee", by "individual ownership" and/or "partnership", in most cases.  There are other methods involving many different "ownership" ideas as well.

A "partnership" is "legally established" addressing the "ownership" percentages.  In other words, what percentage does each partner have in the business.  This can be determined by an "agreed" percentage each have, or by the amount of "initial" investments each provide.

Many large corporations offering "franchising" will provide "projected" fees and profits for an area.  In doing so this will be the "foundation" of necessary "funds" and expected "profits" each "partner" in the franchise can approximate.  From this "profits" as stated in the "legal" contract are "distributed".

Franchise information is available to those with "strong" interests in doing so.  Chic fil A in Atlanta, requires potential "franchise" owners to work in one of their stores ONE year, FIRST.  Professional Marketeers have or can provide numbers for "traffic" (people) with potential increase in areas of a city.  More people, more sales, more profit.

Your question, depends, but any corporation headquarters if you call may give you some numbers for consideration.  Remember, any business in the U.S. takes approximate 2 years to show good profit.