Finance
Payback Period
The time required to recover the initial investment from cash flows, typically measured in months or years. QSR franchises often target 3-5 years.
Related Terms
ROI
Return on Investment - the ratio of net profit to total investment, expressing profitability as a percentage of capital deployed.
Cash-on-Cash Return
The annual pre-tax cash flow divided by the total cash invested, expressed as a percentage. A key metric for evaluating franchise investment performance.
Break-Even Analysis
Calculation of the sales volume required to cover all fixed and variable costs, the point at which a restaurant becomes profitable.