If you have a phenomenal work ethic and the desire to build a business, franchises could be a fairly lucrative investment. Once success is attained, your franchise could replace your salary, while allowing you to enjoy the benefits of self-employment. Of course, you may argue that it's not your intent to replace your salary, but to improve your income. If you have the drive, determination, and vision to build your business, growing your income could be a reality.

So what type of return could you receive from your initial franchise investment? The current F.T.C. rules do not forbid a franchise company from supplying information about the earnings that can be achieved in their business. They do, however, have stringent rules on how this information can be given to a prospective franchisee. Of course, this is one of the real quandaries of investigating most franchises. You are not about to invest until you know how much you can earn; the franchisor probably has the best data to answer this question accurately, but they usually will not share the information.

A good rule of thumb is that you can earn 10% to 15% on your money over time in a totally passive investment. Since most franchises require that you invest your time as well as your money, you should expect a return significantly higher than this level in order to justify the investment. This higher return will also offset the higher risk involved in this type of investment. You should look for earnings of at least 30% of your total investment on an annual basis to consider any franchise as having a reasonable return. You should expect to reach this level, at the latest, by the third year of operation of the business. As your income grows, successful franchisees reinvest profits into additional franchise locations and restart the cycle.

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