As a accountant, I have extensive knowledge of franchise operations. Many are not worth squat. There are a few franchises that are actually worthwhile but are extremely expensive. I would put Tim Hortons, Harvey's, McDonalds and possibly A & W in the mix. Some of the service franchises such as the various plumbing franchises are also not too bad. Of the dry goods franchises, discount shoes seem to work well.
No franchises operations are truly owned by the franchisee. In a good operation, the franchisor dictates all that you do, sell and buy. You really are their manager and pseudo employee and they have you by the nuts. As a result, the franchisor will generally make more than you do when you add up their royalties (generally from 4% to 7% of gross sales), advertising charges (1.5% to 2.5%) and rent (usually higher than market value). Additionally, you are obligated to work under their conditions, i.e. hours, holidays, etc. and to buy almost everything from their designated suppliers at fairly high prices. For example, for one of the aforementioned franchises, they must buy everything from the designated suppliers except for plastic forks, spoons, knives and napkins. There are no volume discounts or spiffs of any kind. The deals are usually absorbed at the corporate level by the franchisor.
If you have the dough (hundreds of thousands of dollars) and you don't mind the franchisor oversight, and, you have a solid work ethic and don't mind gruelling labour and hours, it can be rewarding after a few years. You will only get rich if you own multiple units and can handle them all properly.
