How does a franchise make money?

A franchise makes money through profits received from sales and any service transactions. Typically, this is money that is left over after all overhead costs are taken care of. This is fairly typical for any business.

What makes a franchise function a bit differently than any other business is that there are generally fees associated with owning and operating rights to a franchise. This means that after overhead costs, franchise owners do pay additional fees to the franchise before taking home the rest of the profit.