The rule of thumb for a passive investment is that you should earn 10 to 15 percent ROI over time, however most franchisees are not passive participants so the opportunity to make more money could be substantial. Again, there is no locked-in earnings guarantee. Franchises typically yield earnings of at least 30 percent of their total investment annually, which you could reasonably expect to reach by your third year. The ultimate goal is to clear at least a six-figure income but it may take a few years to reach this level.

There are specific industries, such as hotels, that have a history of offering higher returns. Usually, the higher the initial investment the higher the ROI, however this is not always the case and doing your due diligence is essential before laying out any cash. If a franchisor requires a high initial investment and, after talking to several current franchisees, you discover that the earning potential is about the same as a competing franchise, you may want to go with the latter.