Free calculator
Franchise ROI & Payback Calculator
Model all-in investment, ramp-year cash flow, and steady-state returns to see when you break even and what cash-on-cash ROI looks like at maturity.
Your inputs
Average net cash flow during ramp months (can be negative)
Your results
- Payback period
- Beyond 5 years (in this scenario)
- Year-one net cash flow
- -$144,000
- Steady-state annual cash flow
- $96,000
- Cash-on-cash ROI (steady state)
- 14.8%
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How this is calculated
This calculator estimates how long it takes cumulative cash flow to repay your all-in investment, then shows steady-state returns. All figures are planning estimates.
- Total investment = franchise fee, build-out, equipment, working capital, and pre-opening costs combined (your all-in number).
- Monthly net cash flow = revenue minus all operating costs and debt service, before owner discretionary draws.
- Ramp months = how long you expect net cash flow to stay below steady-state (often 12 to 18 months for wellness studios, estimate).
- Ongoing fees = annual royalties, brand fund, technology fees, and other recurring franchisor charges divided by 12.
- Payback month = first month cumulative cash flow (from opening) crosses zero after subtracting total investment.
- Cash-on-cash ROI = steady-state annual net cash flow ÷ total investment. A 20% cash-on-cash means you return 20 cents per dollar invested annually at maturity (estimate benchmark, not a guarantee).
Worked example
At $650K invested, -$8K/month for 14 ramp months, then $12K/month steady, minus $48K/year in fees: payback lands around month 30 to 36 in many similar scenarios (estimate).
All outputs are planning estimates, not guarantees. Consult the brand FDD and your advisors for decisions.