One of the biggest fears I hear from people exploring a basketball franchise is simple: When do I get my money back? Not revenue. Not hype. Actual return on investment.
That fear is valid. Too many franchisors avoid talking about real numbers. They talk in big revenue figures but skip the part that actually matters—profit. In this breakdown, I’m going to show you exactly how a Little Boomers franchise makes money using a simple, real-world profit and loss example.
This article is for serious franchise prospects who want clarity before they commit. No fluff. No smoke and mirrors. Just the numbers and how to think about them.
This article is based on a recent live breakdown by Little Boomers Basketball founder, Emile Koorey.
Watch the Full Breakdown
Revenue vs Profit: The Biggest Misunderstanding in Franchising
Before we touch any numbers, we need to clear up a common myth.
Revenue does not pay off your franchise investment.
Profit does.
If a franchisor tells you that you’ll make $60,000 in revenue in six months, that does not mean you’ve made your money back. You still need to pay wages, venues, and other costs. Only what’s left after expenses—profit—counts.
This misunderstanding is one of the main reasons people get disappointed in franchise opportunities.
The Four Parts of a Simple Profit & Loss Statement
Every profit and loss statement has four core parts. If you understand these, you’ll understand how any franchise makes money.
Revenue – money coming in
Cost of Goods Sold (COGS) – costs directly tied to delivering the service
Operating Expenses – indirect business costs
Net Profit – what’s left in the bank
Net profit is the only number that matters. Everything else supports it.
A Simple Revenue Example
Let’s walk through a realistic example.
Term Program Revenue
100 kids enrolled
$200 per child for an 8-week term
That’s $20,000 in revenue.
School Program Revenue
300 kids in a primary school program
$80 per child for a 10-week program
That’s $24,000 in revenue.
Total Revenue
$44,000
This number looks great—but it means nothing until we look at costs.
Cost of Goods Sold: What It Takes to Deliver the Service
COGS are expenses you must pay to generate revenue.
Term Program Costs
Court hire: $3,200
Coach wages: $2,400
Medals and certificates: $400
Training kits for new kids: $230
School Program Costs
Coach wages: $2,400
No court hire required
Total COGS
$8,630
These are non-negotiable costs. Without paying them, the program doesn’t run.
Operating Expenses: Running the Business
Operating expenses are indirect costs. The business can still operate without them, but they support growth and structure.
Examples include:
Royalty fee (10% of revenue): $4,400
Marketing spend: $500
Owner wage: $5,000
Total Operating Expenses
$9,900
Understanding royalties is critical when comparing franchises. This is something we’ve broken down in detail in our article Royalty Fees Explained: What Franchise Owners Really Pay, which is worth reading if you’re comparing franchise models.
The Only Number That Matters: Net Profit
Now we bring it all together.
Revenue: $44,000
Minus COGS: $8,630
Minus operating expenses: $9,900
Net Profit
$25,000 (before tax)
This is the money that actually pays down your franchise investment.
If the franchise investment is $60,000 and you generate $25,000 in profit, you’ve reduced your remaining investment to roughly $35,000. That’s how return on investment really works.
Why This Business Model Is Built for Scale
One of the strengths of this basketball franchise is recurring revenue.
Term programs renew every school term
75–80% of kids typically re-enrol when families are looked after
School programs run alongside term programs
This example only used:
One term program
One school contract
There are additional revenue streams available, but this breakdown shows the foundation without overcomplicating things.
Profit Matters Even More When You Sell
Here’s something most people don’t think about early.
When you sell a franchise, it’s usually valued on profit, not revenue.
In many cases, businesses are valued at a multiple of annual profit. The stronger your profit, the stronger your exit. That’s why focusing on clean margins and smart cost control matters from day one.
Common Mistakes People Make
Thinking revenue equals profit
Ignoring costs when calculating ROI
Not understanding how royalties work
Comparing franchises only on entry price
Overestimating early returns
Key Takeaways
Profit pays off your franchise investment, not revenue
A simple P&L tells you more than any sales pitch
Understanding COGS protects your margins
Recurring revenue creates stability
Profit also determines resale value
If you’re deciding between franchising and building something from scratch, this financial clarity is critical. We also cover this comparison in Franchise vs Starting From Scratch (Most People Get This Wrong), which helps put these numbers into context.
FAQ: Common Questions People Ask
How long does it take to make back the franchise investment?
It depends on execution. Some franchisees recover faster by expanding programs and landing school contracts.
Why not focus on revenue targets?
Because revenue doesn’t pay your bills. Profit does.
Are these numbers guaranteed?
No. They’re examples to explain how the model works, not promises.
Do I need to pay myself a wage early on?
Many owners reinvest profits in the first year to grow faster.
Why are school programs so important?
They have strong margins and don’t require venue hire, which improves profitability.
Keen to learn more?
If you’re curious about where you could operate and what territories are currently available, you can explore our Locations Available Map to see what areas are open right now.
Your child’s spot is locked in for the year — no re-enrol stress