In partnership with
mornin’ merrymakers 💅🧃🍿 🧘 🏥
as both a retail operator & customer, i have very mixed feelings about franchises.
they’re one of the most powerful retail scale engines ever invented.
but sometimes they give me the same energy as an mlm pitch that starts with
“hey hun, have you ever wanted to be your own boss?” 😅
franchises are often framed as the safest path to entrepreneurship:
you get a proven brand.
a playbook.
built-in marketing.
a business in a box.
but financially, they’re usually structured to benefit the franchisor more than the franchisee. which is why i’ve been curious to dig into them with a little more nuance.
plus i’m nosy
& franchisors disclose lots of juicy business (& expense) numbers.
in today’s letter, you'll learn:
→ franchising 101
→ business model costs
→ which franchises succeed
→ how much franchises costs for specific brands
franchising 101
at its core, franchising is a licensing arrangement. the franchisor (the brand) gives you (the franchisee) the right to operate under their name, using their systems, processes, and brand recognition.
the franchisor owns:
the brand
the standards
the training
the marketing engine
the playbook
the franchisee owns:
the local business
the lease
the staff
the day-to-day chaos
most of the financial risk
for the franchisor, franchising is the dream.
it’s expansion without funding every store themselves. other people bring the capital. the brand collects the upside. unit count goes up.
for the franchisee, the pitch is that you don’t have to invent the concept. you just have to execute it. in theory, you’re skipping the hardest part of starting a business: making it up from scratch.
in practice, you’re also giving up a lot of control (& paying to do that).
how the pricing usually works
most franchises come with a few financial layers:
the franchise fee: basically your entry ticket.
usually $25k–$75k+ just to join the club.
the full startup investment: buildout, equipment, inventory, hiring, working capital, real estate.
depends on category, it can range from low six figures to millions.
specific investment minimums of brans you know below
ongoing royalties: this is where the model gets spicy.
most franchisees pay 4–10% of gross sales every month.
note: gross sales, not profit. so even if your margins are tight, the royalty check still clears.
marketing & tech fees: for the national/regional services provided
often another 1–4% of gross sales every month.
so basically you pay rent for your space and your brand.
this simple math above should show why people want to be franchisors….
do franchisees actually succeed?
franchises tend to have higher survival rates than independent startups.
some data suggests around:
~85% of franchise locations are still operating after five years
which is meaningfully higher than the average small business. but survival is not the same thing as thriving. profitability varies wildly. because success depends on:
unit economics
local market demand
operator quality
franchisor support (or lack thereof)
lease terms
labor execution
whether the system is designed for franchisee wins… or franchisor growth
one thing is certain, franchising isn’t passive income.
it’s operating a business with guardrails & handcuffs & fees.
let’s take a peak now at some of the jaw dropping fees across different health & wellness categories….
franchise | in a sentence | min investment |
urgent care clinics | $1,228k | |
eye exams, glasses, and vision care | $680k | |
modern acupuncture studios | $258k | |
membership-based chiropractic | $254k | |
functional medicine + chiropractic clinics | $75k |
franchise | in a sentence | min investment |
the "iconic" bodybuilding gym | $1,778k | |
budget-friendly & “judgment free zone” gyms | $1,505k | |
high-energy, low-cost gyms with group fitness | $918k |
franchise | in a sentence | min investment |
a 3-in-1 studio concept combining spin, strength, and yoga. | $500k | |
boxing-inspired with nightclub energy | $371k | |
indoor cycling studios | $338k | |
barre fitness with ballet-inspired movements | $265k | |
large-format reformer pilates | $197k |
franchise | in a sentence | min investment |
cryotherapy, iv drips, red light, and recovery tech. | $777k | |
membership-based massage and skincare | $606k | |
lymphatic drainage + sculpting bodywork | $258k | |
iv hydration therapy clinics | $200k | |
assisted stretching studios | $156k |
franchise | in a sentence | min investment |
modern milennial facial studios with memberships. | $966k | |
focused facial bars with memberships | $352k | |
medspa with aesthetic + anti-aging treatments | $794k | |
medspa with aesthetic + anti-aging treatments | $485k | |
medspa with aesthetic + anti-aging treatments | $431k |
my takeaway
franchises aren’t inherently good or bad businesses.
they’re a replication structure. they works best for franchisees when:
you have significant capital (don't drain your savings or over-leverage)
you're buying into a truly proven system with strong unit economics
you're prepared to follow someone else's rules for 10-20 years
you understand you're buying a job, not passive income
the franchisor's incentives genuinely align with yours
what makes me uncomfortable is how franchising is often sold as a "safe" path to business ownership when the reality is far more complex. you're taking on significant financial risk, giving up autonomy, & paying ongoing fees whether you succeed or not.
giving up 10%+ of your sales going forward is $$$.
especially in brick & mortar.
as a customer, hope this email shed some light to you on why the same chain can feel so different from state to state or even in the same city.
p.s. i’ve learned SO much from my friends using kajabi. if you’re an expert, you should definitely check it out. i know i am as i think about what’s next for us 👀
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