Yesterday, I was talking with a franchise owner about their business and the issue of declining profit margins came up.  As a small business owner, I had to agree that there seems to be so many more factors negatively influencing the bottom line.  Of course, that is one of the reasons Profit Street was created.  When I got back to the office, I did some additional research to see if I could back up our gut feeling.  I found that last year, a large survey was conducted by the research firm Franchise Business Review that supported our perception.  One of its findings was that on average, franchisees across the spectrum earn a profit of only $66,000 a year.  That’s not very much, given you have poured your life savings, blood, sweat and tears into this venture.

Franchises today are faced with a lot of challenges, not only with declining profit margins, but also a lack of time, employee retention, productivity issues, and more.  According to the IFA, the three biggest concerns within the franchise industry are; the National Labor Relations Board’s “joint employer” decision, minimum wage laws and Obamacare’s definition of full time employees. Let us know what you think about this topic. Feel free to share comments.

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