Have you ever dreamed of owning your own restaurant, but the risk of starting from scratch seems scary? That is where franchises offer a tempting solution: the chance to be your own boss with the help of a popular brand and established business model.

But before you get out and open a restaurant, there’s a crucial question to ask: Can you actually make money? With rising food costs and fierce competition, what are the profit margins for restaurant franchises in 2024? And more importantly, how much can you realistically expect to earn as a franchise owner?

Let us see the answers to all these questions below.

What Is A Restaurant Franchise Margin?

Basically, a restaurant franchise margin is how much a franchise owner gets from running a franchise restaurant, calculated in percentage. You get it when you subtract the restaurant’s expenses from its revenue.

These costs can include:

• Franchise Fees
• Operational Costs
• Cost of Goods Sold (COGS)
• Marketing and Advertising Fees
• Other Expenses

Average Restaurant Franchise Margin In India

In the restaurant business, profit margins can vary a lot depending on factors like location, concept, and how efficiently the place is run. Restaurants see a range of 5% to 15% for average profit margins in Indian restaurants, with quick-service restaurants (QSRs) potentially reaching the higher end.

Quick-service restaurants (QSRs) usually see higher profit margins, mainly because QSRs have lower overhead costs and quicker turnover rates. Top QSRs often boast an average profit margin of about 17%, highlighting the market’s financial potential.

How Much Franchise Owners Can Expect To Make?

Glassdoor statistics say that the franchise owner makes between ₹2,00,000 to ₹18,00,000 a year after expenses and royalties. This range may change based on the performance, location, and operational efficacy of the franchisee, thus it’s not a precise number.  But on average we can say, franchise owners by way of salary make around ₹6,00,000.

5 Tips to Increase Franchise Profitability

Optimize Menu Offerings: Highlight high-margin dishes and regularly check how profitable your menu items are. Seasonal or limited-time deals can attract new customers and boost your sales.

Boost Business Efficiencies: Simplify procedures in the kitchen and train your staff to follow streamlined processes. Use advanced inventory systems to track and reduce waste, ensuring you always have the right amount of supplies.

Focus on Marketing and Sales: Create a solid marketing strategy that makes use of multiple marketing platforms and targets your desired clientele. To reach new customers, think about employing online advertising and social media in addition to traditional marketing

Focus on Customer Experience: Invest in training initiatives to raise staff productivity and enhance customer service. Building a devoted clientele and promoting repeat business are two benefits of loyalty programs.

Utilize Technology: Offer online ordering and delivery to reach more customers. Implement modern POS systems to collect data, track sales, and make transactions smoother.

The Key Takeaway

Having a restaurant franchise business is a dream for many. But you have to be mindful that restaurant franchising requires hard work to make it a successful venture.

So to increase your success rate, make sure you dig deep into different franchise options, understand your target market, and implement smart business practices.

Interested in starting your own franchise? Reach out to Bharath Franchise today!