What is the most profitable franchise in Australia? Why the question misleads

• The Franchising Code doesn't require earnings information. If a franchisor gives none, its disclosure document must say it cannot estimate earnings for a particular franchise.
• If a franchisor does give earnings information, it must be in or attached to the disclosure document, and projections must state their assumptions.
• Expectations aren't results: in an FCA pulse survey for the March 2022 quarter, 71% of 122 franchise brands expected more than 95% of their franchisees to make a profit.
• Setup costs vary widely: in FranchiseScope's Register analysis (captured 19 August 2026), median disclosed setup costs run from $27,500 to $79,890 in cleaning (n=55) and from $303,000 to $661,084 in quick-service food (n=174).
• False earnings claims have cost franchisors dearly, including $4.2 million in penalties in the ACCC's case against Geowash, its director and its franchising manager (2019).

• Revenue isn't profit. System-wide sales or growth say nothing about what an owner keeps after royalties, rent, wages, stock and loan repayments.
• There is no audited data. No public source collects franchisee profits by brand, so any ranking relies on franchisor figures, estimates or small samples.
• Survivorship skews the picture. Lists include only systems still operating, and outlets that closed or were sold at a loss drop out of the averages.
• Averages hide the spread. Griffith's 2016 survey found start-up costs for retail franchises ranged from $2,500 to $1.225 million, around a median of $287,500.
• Owner labour gets ignored. Some figures treat the owner's unpaid hours as profit; a fair comparison counts a market wage for your time.
• Location changes everything. The same brand can earn very different amounts at different sites.
• Timing matters. A strong year can reflect promotions or one-off factors that won't repeat.

• It is optional but controlled. If a franchisor proposes to give earnings information, it must be in the disclosure document or attached to it (item 20 of Schedule 1).
• There are no side channels. If earnings information is given before the disclosure document, it must also be given in or with the disclosure document.
• It is broadly defined. Earnings information includes historical earnings for your outlet or another in the system, the differences between them, projections and their assumptions, and any other information from which earnings can be assessed.
• Projections need workings. They must set out the facts and assumptions, the research done, the period covered and why, whether they include depreciation, the franchisee's salary and loan costs, and the interest and tax assumptions.
• A warning is required if none is given: the franchisor must state that earnings may vary between franchises and that it cannot estimate earnings for a particular franchise.
• New figures restart the clock. If the franchisor gives you new earnings information, the 14-day consideration period starts again before it can sign.
• Claims must be backed up. The ACCC tells franchisors to keep the documents behind any earnings claim, and misleading statements breach the Australian Consumer Law even when made outside the disclosure document.

• Franchisor optimism: 71% of 122 brands in the FCA's March 2022 quarter pulse survey, run by FRANdata, expected more than 95% of their franchisees to make a profit. That is an expectation reported by franchisors, not a measured result.
• Harder times: in the FCA's June 2023 pulse survey (65 brands, 19,628 outlets), 36% of respondents reported lower franchisee revenue than in the June 2022 quarter.
• A real-world gap: ASBFEO reported in 2026 on a franchised recreation business bought on projected annual revenue of more than $600,000 that turned out closer to $450,000. The owner believed the pre-sale uplift came from discount promotions and changes in how online sales were recorded.
• Court findings: in 2019 the Federal Court found Geowash had made false or misleading representations about average monthly earnings on its website, with no reasonable grounds, and ordered $4.2 million in penalties against the franchisor, its director and its franchising manager.
• Guaranteed income claims: in 2021 the Federal Court ordered Megasave Couriers to pay $1.9 million in penalties over false or misleading representations to prospective franchisees about guaranteed minimum weekly payments and guaranteed annual income.
• Complaints data: misrepresentations about earnings, profits and business viability before purchase are among the issues franchisees regularly raise with the ACCC.

1. Start with the full cost to open: the setup cost range on the Register and in the disclosure document, plus working capital to carry you until the outlet covers its costs.
2. Get any earnings information in writing. If there is none, ask current franchisees with similar sites for their actual figures.
3. Build your own sales estimate for your site from realistic customer numbers and average spend, and compare it with similar outlets.
4. Subtract every cost: cost of goods, staff wages, rent, royalties, marketing and other fund contributions, technology fees, insurance and loan repayments.
5. Count your own time. Include a market wage for the hours you will work, or the result overstates your return.
6. Stress test the result with sales 10% and 20% lower, and with higher wages and rent.
7. Compare the answer with your alternatives, such as your current salary and what your capital could earn elsewhere.
8. Have an accountant review the model before you sign.

Illustrative only, using assumed figures rather than benchmarks: an outlet turning over $500,000 a year, cost of goods at 30% of sales, staff wages of $150,000, rent of $60,000, royalty and marketing fees of 8% of sales, other overheads of $30,000 and loan repayments of $30,000.

• At $500,000 in sales, costs before loan repayments total $430,000, leaving $70,000. After $30,000 in loan repayments, $40,000 is left for the owner before tax.
• At $450,000, a 10% fall, cost of goods drops to $135,000 and fees to $36,000, but wages, rent and overheads don't move. That leaves $39,000 before loan repayments and $9,000 for the owner.
• So in this example a 10% fall in sales cuts the owner's income by more than three-quarters, from $40,000 to $9,000.
• If the owner works 50 hours a week for 48 weeks, $40,000 is about $16.67 an hour before tax, which you can compare with what you would earn as an employee.
• Fixed costs, not headline sales, decide whether an outlet will be profitable for you, so test them first.

• What is the range, not just the average, of sales and profit across outlets like mine?
• How many outlets made a loss last year?
• Do your earnings figures include a manager's wage or the owner's labour?
• What rebates do you receive from suppliers, and how are they used? Item 10 of the disclosure document must cover them.
• How many outlets were transferred, closed or terminated in each of the last three years?
• Were sales at the site I'm buying boosted by promotions before the sale?
• To franchisees: how long did it take before you could pay yourself a wage?

• Is it the owner's profit, or system sales or revenue?
• Is it historical, from real outlets, or a projection?
• Are the assumptions stated, including the owner's wage and loan costs?
• Does it come from outlets similar to yours in size, location and age?
• Have current and former franchisees confirmed it?
• Has your accountant tested it against your own forecast?