Franchise payback calculator
Choose a franchise to load its cost to open, fees and sales per location, then add your own running costs and loan to see when the cash you put in comes back.
More assumptions: growth, payroll, depreciation, working capital, sale value
Chick-fil-A: five years at these numbers
Year by year
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Sales | $7,328,991 | $9,527,689 | $9,813,519 | $10,107,925 | $10,411,163 |
| Royalty and brand fund | ($1,099,349) | ($1,429,153) | ($1,472,028) | ($1,516,189) | ($1,561,674) |
| Products and materials | ($2,198,697) | ($2,858,307) | ($2,944,056) | ($3,032,377) | ($3,123,349) |
| Staff wages and payroll | ($2,134,202) | ($2,774,463) | ($2,857,697) | ($2,943,428) | ($3,031,731) |
| Rent and occupancy | ($733,200) | ($733,200) | ($733,200) | ($733,200) | ($733,200) |
| Local marketing | ($146,580) | ($190,554) | ($196,270) | ($202,158) | ($208,223) |
| Other running costs | ($659,609) | ($857,492) | ($883,217) | ($909,713) | ($937,005) |
| Owner or manager salary | $0 | $0 | $0 | $0 | $0 |
| EBITDA | $357,354 | $684,520 | $727,052 | $770,859 | $815,981 |
| EBITDA margin | 4.9% | 7.2% | 7.4% | 7.6% | 7.8% |
| Depreciation and amortization | ($214,238) | ($214,238) | ($214,238) | ($214,238) | ($214,238) |
| Interest | ($147,052) | ($137,338) | ($126,607) | ($114,752) | ($101,657) |
| Tax | $0 | $0 | $0 | $0 | $0 |
| Net income | −$3,936 | $332,944 | $386,206 | $441,868 | $500,086 |
Your inputs, five years by month, statements by year and Chick-fil-A’s filed figures. Every cell is a live formula, so it works in Excel, Google Sheets and Numbers.
Questions
What is a typical payback period for a franchise?
Many buyers look for the cash they put in to come back within two to four years, but it ranges widely: a low-cost service franchise run from home can pay back in months, while a full restaurant or hotel can take well over five years. Rent, staff costs and how quickly sales build matter as much as the brand.
Why does the calculator start sales below the full figure?
A new location rarely matches the sales of established ones in its first year. Locations a filing reports on have usually been open a year or more, so the model starts lower and climbs to that figure over the months you set. Set the starting share to 100% to skip the climb.
Should I include my own salary?
If you'll run the business yourself, leave the salary at 0 and treat the cash to you as your pay plus the return on your money. If you'll hire a manager, enter their salary so the payback reflects a business that runs without you.
What running cost percentages should I use?
Ask existing owners: franchisors must list their current and former franchisees, and owners will often share their costs. Products, staff and rent are usually the largest. The calculator starts from levels common for the kind of business, not figures for the brand itself.
How is the year-5 value worked out?
Small businesses commonly sell for a multiple of a year's EBITDA (earnings before interest, tax, depreciation and amortization), often 2 to 4 times. The calculator multiplies year 5's EBITDA by the multiple you choose and subtracts the loan still owed.