There are a slew of important factors for franchisees to consider when considering what to franchise: brand, level of commitment, franchisor support — you get the picture. While passion for your business is important, income is also a crucial part of deciding which franchise category to pursue.
A 2022 report from Franchise Business Review surveyed 30,000 franchise business owners and calculated the average annual income (AAI) a franchisee makes per category. Though a fast food franchise may be the first thing that comes to mind when thinking about the big bucks, the survey found this wasn’t necessarily the case.
So before you commit to brands like McDonald’s, Taco Bell and Dunkin’, consider these franchise categories that reported standout salaries.
According to Franchise Business Review, franchise owners in the senior care sector took the spot for the highest average annual income. Franchisees in the sector reported an average annual income of $155,132. Senior care franchises provide services like medical and non-medical homecare, medical staffing, personal companionship and hospice services.
Demand for franchises in this industry doesn’t look like it’ll wane anytime soon. According to a 2021 report from the Administration for Community Living, there will be about 80.8 million older persons in the United States by 2040 — more than twice as many as there were in 2000. While people age 65 and older represented around 16% of the population in 2019, they are expected to account for 21.6% of the population by 2040.
Here are some of the best senior care businesses to franchise, according to Entrepreneur magazine.
Related: The Hottest Franchise Categories of 2022
Real-estate franchisees reported the second-highest annual income in the FBR report, reporting an income of $152,852. Most real-estate franchises help facilitate the home buying process, although some businesses in this sector handle foreclosed-property sales or even real-estate photography.
Pew Research found that from fourth-quarter 2019 to the fourth quarter of 2020, the number of homeowners increased by an estimated 2.1 million over the prior year. Market conditions, like low interest rates, continue to make homebuying easier for those who want to take that step. For brands in this category, other trends, like the move to more affordable cities, will be of utmost importance.
Several real-estate franchises have fared well on Entrepreneur’s Franchise 500 list.
Third on FBR’s list was personal services. The sector makes an average of $126,070 a year. Personal service franchises cover a variety of businesses, ranging from fitness and massage to hair care.
During the pandemic’s restrictions and in-person limitations, many businesses in this sector had to close. However, a report from the International Franchise Association had an optimistic view of the sector. The report predicted that the personal services sector will drive job creation as consumers look to spend more on personal care. Data from the report also suggests that franchise establishments in the personal services sector would improve their contribution to the economy by nearly 40% post-2020.
Related: 2022 Franchise 500 Ranking
Business services franchisees reported the fourth-highest annual income in the category list, recording an AAI of $122,394. Businesses services franchises cover all parts that may come with running a business. Franchisees in this category can explore businesses in staffing, workplace development or even signs and graphics.
Similar to personal services, business services franchises suffered during the pandemic. According to a study by FRANdata, employment in the sector decreased 9.5% in 2020. But the category seems to be making a healthy recovery: In 2021, employment rose to a record 670,591. This improvement is supported by data from the Census Bureau, which found a record 4.4 million new businesses were created during 2020.
Pet services franchisees took the fifth spot on the list, reporting an AAI of $119,231. Prospective franchise owners who are hoping to cash in on the explosive category can start franchise businesses that deal with pet supplies, pet daycare, grooming or even training. The business ownership possibilities are endless, and many pet franchises can be started with less than a $50,000 investment.
The success stories of entrepreneurs in this category are no surprise considering the boon of pet ownership throughout the pandemic. An ASPCA survey found that from March 2020 to May 2021, nearly a fifth of American households adopted a dog or cat. And these owners are in it for the long haul, as an overwhelming majority of these households still have that pet and aren’t considering rehoming their pet in the near future.
If you aren’t interested in any of the five highest-earning franchise categories, just being in the franchise system sets you up for high income potential. The survey found that across the board, franchisees made a significantly higher amount than those who owned a small business independently. While the average franchisee had an AAI of $107,119, independent small-business owners reported an AAI of $64,432. The gap gets even wider when you look at the AAIs of franchisees who survive their first two years of business (which is considered the “startup period”) — those franchisees make an average annual income of $118,792.
So no matter which franchise category you choose, rest assured that the statistics are on your side.
Related: Simply the Best: the Top Franchises in 110 Categories