Sales numbers are seductive.
I see posts all the time on X and in articles about franchise operations bragging, “We did $10 million in sales this year!” But here’s the truth: sales numbers alone are smoke and mirrors. The key metric everyone overlooks? Profit.
Sales ≠ Success. High sales are impressive, but they don’t reveal the full story. You could have a million-dollar franchise, but if the expenses eat up $950,000, you are only left with $50,000 in profit. Suddenly, that “success” does not look so shiny.
Profit Is What You Keep. Profit is what matters. It’s the money that lands in your pocket after all the fees, royalties, payroll, and operational costs. Without a solid profit, high sales are just a vanity metric.
Franchisors Won’t Tell You This. Financial representations in franchise disclosure documents focus heavily on sales figures, often leaving out details about profitability. It is up to you to dig deeper. Ask existing franchisees: What are their real take-home earnings? What unexpected costs have eaten into their margins?
Do Your Homework. Do not be blinded by flashy sales stats. When examining a franchise, always focus on the franchisor support and how much profit you can reasonably expect. It’s the only way to gauge the true potential of your investment.
Next time you see a post boasting millions in sales, remember: the top line is impressive, but the bottom line is what you live on. Profit is the real measure of success. Focus on it.