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Franchise BrandsLSE:FRAN +1.72%91 Operating Margin % is 14.23% as of Dec. 2025, which is 24% above its 10-year median of 11.50. GuruFocus rates LSE:FRAN with a GF Score™ of 91/100 and a GF Value™ of £1.78 (Modestly Undervalued). The stock has 7 warning signs investors should review. Among 1,067 Business Services companies, Franchise Brands ranks better than 75.26% on this metric.
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
Franchise Brands Operating Margin % Related Terms
Franchise Brands Operating Margin % Historical Data
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The historical data trend for Franchise Brands's Operating Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
LSE:FRAN vs CTAS, CPRT, GPN: Operating Margin % Comparison
For the Specialty Business Services subindustry, Franchise Brands's Operating Margin %, along with its competitors' market caps and Operating Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Franchise Brands Operating Margin % vs Business Services Industry
For the Business Services industry and Industrials sector, Franchise Brands's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Franchise Brands's Operating Margin % falls into.
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
Franchise Brands's Operating Margin % for the fiscal year that ended in Dec. 2025 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Franchise Brands (LSE:FRAN) has a Operating Margin % of 14.23% as of Dec. 2025. Operating margin is the ratio of total operating income to net sales. View historical data on Franchise Brands and its competitors. This is 24% above median its historical median of 11.50. Over the past decade, Franchise Brands' Operating Margin % has ranged from 0.78 to 16.24. According to the industry distribution chart, Franchise Brands ranks #264 out of 1067 companies in the Business Services industry, placing it in the top 24.7%.
Is Franchise Brands' Operating Margin % too high?
Franchise Brands' current Operating Margin % of 14.23% is 24% above median its 10-year median of 11.50. Over the past 10 years, this metric has ranged from a low of 0.78 to a high of 16.24. The Business Services industry median Operating Margin % is 6.30. Franchise Brands' value of 14.23% is 125.9% above this industry median. Based on the distribution chart, Franchise Brands ranks #264 out of 1067 companies in the Business Services industry, which is in the top quartile — a strong position relative to peers. Overall, Franchise Brands has a GF Score™ of 91/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Franchise Brands' Operating Margin % compare to CTAS and CPRT?
According to the Business Services industry distribution chart, Franchise Brands ranks #264 out of 1067 companies for Operating Margin %. This places Franchise Brands in the top 25% of its industry — outperforming the majority of peers. The industry median Operating Margin % is 6.30. Franchise Brands' value of 14.23% is 125.9% above this benchmark. Historically, Franchise Brands' own Operating Margin % has ranged from 0.78 to 16.24 over the past decade. While the company's 10-year median is 11.50 vs. the industry median of 6.30, Franchise Brands has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Operating Margin % for a Business Services company?
The median Operating Margin % among Business Services companies is 6.30, based on 1,067 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Franchise Brands's current Operating Margin % of 14.23% is 125.9% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on Franchise Brands and its competitors. For the Business Services industry, the median Operating Margin % is 6.30 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Franchise Brands's current Operating Margin % is 14.23%, which is 24% above median its own 10-year median of 11.50. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Franchise Brands stock overvalued right now?
Based on GuruFocus' analysis, Franchise Brands (LSE:FRAN) is currently considered Modestly Undervalued. The stock's GF Value™ is £1.78, compared to a current price of £1.48 — trading 16.9% below its estimated fair value. The current Operating Margin % is 14.23%, which is 24% above median its 10-year median of 11.50 and 125.9% above the Business Services industry median of 6.30. Franchise Brands' overall GF Score™ is 91/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For Franchise Brands (LSE:FRAN), the current Operating Margin % is 14.23% as of Dec. 2025. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Franchise Brands (LSE:FRAN) Overvalued in 2026?
Based on GuruFocus' analysis, Franchise Brands stock appears to be undervalued.
The current stock price of £1.48 is trading 16.9% below its estimated GF Value™ of £1.78.
GuruFocus considers Franchise Brands to be Modestly Undervalued.
Key valuation signals for LSE:FRAN:
Operating Margin %: 14.23% (24% above median its 10-year median of 11.50)
GF Value™: £1.78 vs. price of £1.48 (16.9% below fair value)
Industry Position: 125.9% above the Business Services median (#264 of 1067)
No single metric tells the full story. See the LSE:FRAN stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Franchise Brands PLC is a holding company engaged in franchising and related activities. Its brands associated with the company are Metro Rod, Chips Away, Barking Mad, Oven Clean, Metro Plumb, Willow Pumps, and Filta. Its operating segments are Pirtek Europe, Water & Waste Services, Filta International, B2C, Azura, and Other operations, and the majority of the revenue comes from the Pirtek Europe segment.
91GF Score
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