When does each new store pay back its build-out cost, and how does the return compound across the lease?

MetricCumulative store cash return against build-out capital, by month since opening

Unitratio of cumulative four-wall cash contribution to total opening investment, plotted monthly

Cumulative store-level gross profit divided by store opening plus ramp investment across months since opening. Multiple store cohorts. Build by tracking per-store P&L cumulatively against opening capex. Example: Top-quartile stores 1.0x at M14; bottom-quartile never cross (close them).

ROAS

Return on ad spend. Revenue attributed to a campaign divided by the spend on that campaign.

P&L

Profit and loss statement. Revenue minus cost of goods sold minus operating expenses, down to operating profit.

Single-unit physical retail and food service, cumulative four-wall cash contribution against total opening investment including build-out, opening inventory, pre-opening cost and working capital to breakeven, US franchise disclosure and operator sources, 2024 to 2026 · This is not the marketing ROAS family and shares nothing with it but the word. Here the denominator is capital sunk into a lease and a fit-out, the numerator is four-wall cash, and the time axis runs in years rather than days. Do not read these numbers against the channel ROAS or rep ROAS cards. Confidence is low because the only broad payback samples available are franchise disclosure compilations, which skew heavily toward food service and services retail rather than merchandise retail, and because operators define the denominator inconsistently. The most common understatement is excluding working capital to breakeven: franchisors typically disclose 3 to 6 months in Item 7 while 9 to 12 months is realistic, and a concept store model with $130,000 of capex needed $272,000 of cash to reach breakeven at month 33. Two further cautions. Depreciation should be carried as a real expense because it forecasts the refresh and remodel spend that resets the curve, typically at year five to seven. And the curve must be truncated at the lease term, since a store that reaches 1.0x at month 54 on a 60-month lease with no renewal option has not really paid back at all.

Category split omitted: The available payback samples are franchise disclosure compilations weighted toward food service, and no two independent Tier 1 or Tier 2 datasets publish store payback split by retail category.

The cohort curves flatten below 1.0x and run parallel to the axis instead of continuing to climb, meaning stores reach a modest cash contribution and then stop improving, so later vintages never catch the earlier ones.

Month 30 cohort sitting at 0.55x and adding under 0.01x per month, which extrapolates past month 70 on a 60 month lease. The store will be handed back before it returns its build-out.

• Put working capital to breakeven inside the denominator, not beside it. A model showing $130,000 of capex actually required $272,000 of cash to reach breakeven at month 33, so a curve built on fit-out alone will overstate return by roughly half in the early months (Financial Models Lab, Pressa2Join).
• Truncate the curve at lease expiry and mark the renewal option on the chart. A store crossing 1.0x at month 54 on a 60-month lease with no option has returned capital in theory and nothing in practice, and this is the single most common way a store portfolio looks solvent on paper.
• Underwrite new sites on revenue-to-investment before signing, since a ratio above 2x reliably indicates payback inside 3 to 4 years and below 1x indicates an extended wait. It is a pre-commitment filter and costs nothing, unlike discovering the answer at month 30 (Franchise Fast Track).
• Carry depreciation as a real expense in the four-wall number rather than adding it back, because it forecasts the refresh cash the store will demand at year five to seven and a curve that ignores it will show payback that the remodel then erases (Harrison and Co via Franchise Times).

1. Franchise Fast TrackWhat Does Franchise Investment Return Mean for Owners · 2026 · broad sample of franchise brands, FDD Item 7 and Item 19 disclosures Median payback across a broad sample of franchise brands is 5.4 years with a mean of 6.2 years. A revenue-to-investment ratio above 2x reliably indicates payback within 3 to 4 years, below 1x means an extended wait. 15% or higher annual cash-on-cash is considered solid, below 12% rarely justifies active ownership. franchisefasttrack.io ↗
2. Franchise Times, reporting Harrison and CoRestaurant Operators Take Note: Look Beyond Unit Economics · 2024 · presentation at the Restaurant Finance and Development Conference Almost all restaurant companies going public show a 30% cash-on-cash return at store level, which does not by itself predict success, and depreciation should be treated as a real expense because it signals future refresh and remodel cash needs. franchisetimes.com ↗
3. Franchisor SalesOne Metric You Need to Understand: The Franchise Investment Ratio · 2025 · FDD Item 19 financial performance representation worked example An average franchisee investing around $735,000 and generating $198,000 in EBITDA achieves 3.7-year capital recovery, with some locations breaking even faster. franchisorsales.org ↗
4. All Consulting FirmsUltimate Guide to Franchise ROI Analysis · 2025 · franchise ROI methodology with QSR benchmark Quick service restaurant franchises often see payback periods of 3 to 5 years, and a $200,000 investment returning $50,000 annually pays back in 4 years. allconsultingfirms.com ↗
5. Pressa2JoinSetting Franchise ROI Expectations for Investors · 2026 · practitioner analysis of FDD Item 7 and Item 19 disclosures A healthy unit typically yields 15 to 25% annualised return after a fair market owner salary. Franchisors list 3 to 6 months of working capital in Item 7 but 9 to 12 months of runway is realistic, and a marketed 18-month payback on a $500,000 investment modelled out to roughly four years. pressa2join.com ↗
6. Financial Models LabConcept Store Financial Plan · 2025 · single-unit concept store financial model A concept store with $130,000 initial capex needs a minimum $272,000 cash reserve to cover capex plus operating losses to breakeven, reaching cash flow breakeven at 33 months despite an 82.5% gross margin, against roughly $22,000 of monthly fixed operating cost. financialmodelslab.com ↗
7. Wall Street PrepPayback Period Formula and Calculations · 2025 · methodology reference with a retail store example Payback period is initial investment divided by annual cash flow, so a $400,000 store build-out returning $200,000 a year pays back in two years. wallstreetprep.com ↗
8. Auxo Capital AdvisorsRestaurant Valuation Multiples: EBITDA, SDE and Pricing · 2025 · restaurant transaction underwriting practice Investors underwriting multi-unit operators review store-level EBITDA, four-wall margin, AUV, same-store sales, occupancy cost and new-unit payback together, since a multiple resting on a few strong locations does not represent durable enterprise value. auxocapitaladvisors.com ↗