Sizing Up Salaries Inside Franchisers

When it comes to making money in franchising, the focus usually is on what franchisees can pocket. Seldom is there discussion about the pay of those on the other side of the contract — the franchisers.

Partly, that’s because franchising firms aren’t required to disclose managerial-staff salary information. Even if they’re publicly traded, only very senior compensation, such as that for chief executive and chief financial officers, is published.

But in recent months, FranData Inc., a franchise-information firm in Arlington, Va., asked franchisers to see their payroll numbers, responding to requests from some franchisers about industry compensation rates.

Foreseeing a difficult year, franchisers were increasingly looking at their expenses, says FranData President and CEO Darrell Johnson. “They were asking, ‘What, for example, does it cost us to hire a franchise-development person?'” Such specialists oversee efforts to attract new franchisees to a brand and, thus, are key to revenue growth. In the past, franchisers had relied largely on “hearsay and back-alley information” in setting pay levels, he says. Read on…

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