Franchise owners generate income primarily through the net operational profits of their local business locations. After paying all operating expenses—including employee wages, cost of goods sold, rent, utilities, local marketing outlays, and ongoing royalty and ad-fund fees owed to the corporate franchisor—the remaining cash flow belongs to the owner. Depending on how the business is structured, the owner may take a regular management salary, draw owner distributions, or retain earnings within the company to fund future expansion and additional franchise units.