Home Free Tools Franchise ROI Calculator — Evaluate Whether a Franchise Is Worth Your Investment
Growth Tool — Franchise Investment Calculator

Franchise ROI Calculator — Evaluate Whether a Franchise Is Worth Your Investment

Calculate monthly net profit, annual ROI, and payback period for any franchise investment — including fee, setup, royalty, and operating costs.

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Formula & How It Works

Total Investment = Franchise Fee + Setup + Opening Inventory
Monthly Profit = Gross Profit − Royalty − Overheads
Annual ROI % = (Monthly Profit × 12) ÷ Total Investment × 100
Payback = Total Investment ÷ Monthly Profit

Worked Example

Scenario: Fee ₹5L, Setup ₹15L, Inventory ₹5L = ₹25L total. Revenue ₹15L/mo, GM 40%, Royalty 5%, OH ₹3L.

Gross=₹6L | Royalty=₹75K | Profit=₹2.25L/mo | Annual ROI=10.8% | Payback=11 months

When to Use This Calculator

  • Evaluate a franchise before signing the agreement
  • Compare multiple franchise opportunities
  • Present financial case to lender for franchise loan
  • Negotiate franchise fee based on projected ROI
  • Set monthly revenue targets for break-even

Frequently Asked Questions

Franchise fee (one-time), fit-out and equipment, opening inventory, working capital, training fees, and deposits.
Royalty is a % of monthly revenue paid to the franchisor for ongoing brand and support use. Typically 2–8% of revenue.
Payback = Total Investment ÷ Monthly Net Profit. Compare against the typical lease term (usually 3–5 years).
A minimum 20–25% annual ROI is expected. Payback within 2–3 years is considered attractive for a franchise.
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