Franchise Owner Salary: FDD Data

Franchise owner earnings vary dramatically by brand, category, and location. Based on FDD Item 19 data analyzed by FranchiseVerdict, only about 45% of the FDD brands we track publish an average gross-sales figure at all. And revenue is not profit — after royalties, rent, labor, and operating costs, actual owner take-home is significantly lower, and very few FDDs disclose it.

What FDD Item 19 actually tells you

The Franchise Disclosure Document (FDD) contains 23 items of required information. Item 19 is the "Financial Performance Representation" — the only place where a franchisor can legally make claims about how much money franchisees earn. However, there are important caveats:

• Disclosure is voluntary. Only about 45% of the FDD brands we track publish an average gross-sales figure in Item 19. Brands with weaker unit economics are less likely to disclose.
• Metrics vary wildly. Some brands report gross sales, others report net income, and others report EBITDA or "owner benefit." There is no standard format, which makes cross-brand comparison difficult without normalization.
• Averages can mislead. Many brands report only average gross sales, which are skewed upward by top-performing locations. The median (50th percentile) is almost always lower, sometimes by 20% or more.
• Revenue is not income. Even when a brand reports $1 million in average gross sales, that figure does not account for royalties, advertising fees, rent, labor, cost of goods, or any other operating expense.

For a full breakdown of every FDD item and what to look for, see our guide to reading an FDD.

Average franchise revenue by category

Using Item 19 data from brands that disclose, here are average reported revenues by franchise category, averaged over the brands whose figure is per-outlet and comparable. Keep in mind that these are revenue figures, not profit.

Full-Service Restaurants and Automotive report the highest average gross sales in this table, but high-revenue concepts often carry the highest operating costs too. Lower-revenue service concepts can keep more of each dollar because their overhead is lower, but no Item 19 figure here measures take-home pay. You can filter and compare brands by revenue on the browse page.

The gap between revenue and take-home pay

The single biggest mistake prospective franchise owners make is conflating revenue with income. Here is an illustrative breakdown, using example cost ranges rather than any brand's filing, of where the money goes for a franchise generating $1 million in annual revenue:

• Royalty fees (4–8%): $40,000–$80,000 paid to the franchisor as a percentage of gross sales. This is the cost of the brand name, operating system, and ongoing support. The average royalty across the FDD brands we track is 6.3%.
• Advertising fund (1–3%): $10,000–$30,000 contributed to a national or regional marketing fund. You pay this whether or not the advertising benefits your specific location.
• Cost of goods sold (25–35%): $250,000–$350,000 for food, materials, or supplies depending on the business type.
• Labor (25–35%): $250,000–$350,000 for employees, managers, payroll taxes, and benefits.
• Rent & occupancy (8–12%): $80,000–$120,000 for your physical location, including CAM charges, insurance, and utilities.
• Other operating expenses (5–10%): $50,000–$100,000 for technology, supplies, repairs, local marketing, legal, and accounting.

What is left after those lines, before debt service and taxes, is the owner's return — and across these example ranges it runs from a solid income to a loss. If you financed the business with an SBA loan (common for investments over $150K), debt payments will reduce take-home further. A brand with a 6% royalty and 2% ad fund takes $80,000 off the top of $1M in revenue before any operating costs are paid.

What well-known brands report

Among brands that disclose Item 19 data, here is what several well-known names report, ordered by comparable average gross sales. These are sales figures, not owner income:

*Chick-fil-A's franchise model is unique: the company owns the restaurant and equipment. The operator's initial fee is only $10,000, but Chick-fil-A retains ownership and takes a larger share of revenue.

High revenue does not automatically mean high owner income. A McDonald's reporting $4.1M in average gross sales pays royalties (5% or 4% of Gross Sales, depending on the circumstances), advertising, food, labor, and rent out of it, while a lower-revenue home services franchise can keep a larger share of each dollar because its operating costs are a fraction of the restaurant model. Neither number in Item 19 is profit.

How to research earnings for any franchise

Before investing in any franchise, follow these four steps to build a realistic picture of what you might actually earn:

1. Check Item 19 in the FDD. Request the FDD from the franchisor (they are legally required to provide it). Look for the Item 19 section. If the brand does not include one, that itself is a data point — ask the franchisor why. You can also check whether a brand discloses Item 19 on its FranchiseVerdict profile.
2. Calculate your real cost after fees. Take the reported revenue and subtract the royalty percentage, ad fund contribution, and estimated operating costs for your market. A brand reporting $800K in average gross sales with a 7% royalty and 2% ad fund is already $72K in fees before you pay a single employee.
3. Talk to existing franchisees. Item 20 of the FDD lists every current and former franchisee with contact information. Call at least 10. Ask about actual take-home pay, not revenue. Our contacts product provides verified franchisee phone numbers and emails to streamline this process.
4. Check SBA loan performance. If a brand has a high SBA charge-off rate, it means a significant percentage of owners who borrowed to buy in could not repay their loans. This is a strong signal about real-world profitability. Every brand page on FranchiseVerdict includes SBA loan data when available.

Methodology

Revenue figures in this article are derived from Item 19 disclosures in publicly available FDDs filed with state franchise regulators. Category averages are calculated across brands that disclose Item 19 data and should not be treated as representative of all brands in a category, since non-disclosing brands are excluded. The cost ranges in the illustrative breakdown are examples, not figures from any filing. For our full approach, see the methodology page.

The bottom line on franchise earnings

Most franchise owners are not getting rich. Few FDDs disclose take-home pay at all, gross sales are not profit, and the wealth story that franchise brokers sell rarely survives the math. The owners who do well picked brands with strong unit economics, went in with enough capital to survive the ramp-up, and treated the business as a full-time commitment. The ones who struggled bought on the strength of a brand name without doing the math on what they would actually keep after fees, labor, and rent.

Related franchise research

Continue your research with our franchise failure rate analysis, is buying a franchise worth it, and McDonald's franchise cost breakdown.