Restaurant Franchisee Satisfaction Problems

Franchise Business Review (FBR) dubiously reports that restaurant franchisees consistently (in their survey) have the lowest franchisee side satisfaction ratings. FBR President Michelle Rowan, in the interview opines that that is due to all the challenges that segment faces: employee turnover, food costs and the expense/equipment needed to start a food franchise.

The report (attached ) lists an average "food and beverage" investment of $362,250 and "annual profit" of about $90,000, per the chart on page 7.  Unfortunately, this was the worst investment to earnings ratio among the sectors listed on the chart.

The $90,000 includes both multiunit and single unit franchisee reported earnings before tax, so a better apples to apples number is needed..

As we know, debt service and CAPEX (remodeling, new equipmernt, etc)  may or may not be in these numbers.

This is worth a followup and I will post additional information upon investigation.

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Pre-Tax Revenue

John, you are right to point out that FBR ought not to talk about  earnings at all.  They are aggregating pre-tax revenue and reporting on that.  And it self-reporting at that.  There is no reason for Michelle to talk about "earnings" or "annual profit", as its misleading and detracts from their overall reporting.