About the Franchise ROI Calculator
What is the Franchise ROI Calculator?
Franchise brochures highlight revenue; your return depends on what remains after materials, royalty, marketing fees, rent and salaries. This franchise ROI calculator works through those costs to the monthly profit.
It then shows the payback period on your total investment – franchise fee, setup and working capital – and the revenue you need just to break even.
How to use the Franchise ROI Calculator
- Franchise Fee (₹) (sample: 5,00,000)
- Setup – interiors, equipment, deposit (₹) (sample: 15,00,000)
- Working Capital (₹) (sample: 3,00,000)
- Expected Monthly Revenue (₹) (sample: 8,00,000)
- Gross Margin after Materials (%) (sample: 60)
- Royalty (% of revenue) (sample: 6)
- Marketing Fee (% of revenue) (sample: 2)
- Monthly Rent, Salaries & Utilities (₹) (sample: 3,00,000)
- Press Calculate Franchise ROI (results also refresh as you type). The result card shows the Payback Period, along with Monthly operating profit, Annual return on investment, Total investment and Royalty + marketing fees per month.
Formula used
Monthly profit = Revenue × (Gross margin % − Royalty % − Marketing fee %) − Fixed costs
- Payback = total investment ÷ monthly profit
- Annual ROI = monthly profit × 12 ÷ total investment
Profit is before tax, depreciation and any loan interest.
Worked example
These are the sample values already filled in the calculator above, and the result it returns for them:
| Input | Sample value |
|---|---|
| Franchise Fee (₹) | 5,00,000 |
| Setup – interiors, equipment, deposit (₹) | 15,00,000 |
| Working Capital (₹) | 3,00,000 |
| Expected Monthly Revenue (₹) | 8,00,000 |
| Gross Margin after Materials (%) | 60 |
| Royalty (% of revenue) | 6 |
| Marketing Fee (% of revenue) | 2 |
| Monthly Rent, Salaries & Utilities (₹) | 3,00,000 |
| Result | Value |
|---|---|
| Payback Period | 1y 8m |
| Monthly operating profit | ₹1,16,000 |
| Annual return on investment | 60.52% |
| Total investment | ₹23,00,000 |
| Royalty + marketing fees per month | ₹64,000 |
| Monthly revenue needed to break even | ₹5,76,923 |
Tips for using the Franchise ROI Calculator
- Speak to existing franchisees about real revenue and costs before signing.
- Royalty is charged on revenue, not profit, so it bites hardest in slow months.
- Check the agreement's lock-in, renewal fee and territory exclusivity.