Costs for starting a franchise can range anywhere from less than $10,000 to over $1 million, with a majority of them in the range of $50-100,000. Determining what you can afford should be one of the first things you do when you start your research. Knowing how much you can invest in the business or how much you’ve been approved for, will help you set an overall budget.
A lot of the investment will go into the front-end of the business, particularly the franchisee fee and start-up fees. The franchise fee is a one-time fee that allows the entrepreneur access to the business model, marketing materials, and everything else needed.
Although this isn’t a full list, here are some of the major fees/payments that you’ll have to make before opening your franchise:
Now that your franchise is built and you’re ready to open, what other fees are there? Let’s take a look:
What to Expect as a Franchisee-The Educated Franchisee
It’s not a guaranteed thing, nor is it expected, but many franchisors are now providing discounts to minorities, veterans, and women. This can include things like lower franchise fees and reduced royalties. Some franchisors are even running promotions throughout the year: buy our franchise today and pay no fees for the first years, etc.
So as you can see, it’s important to take a good hard look at the expenses you’ll be incurring. But one of the great things about franchising is the fact that the franchisors will tell you these costs. Although they can only estimate, franchisors will be able to give you an idea of when you’ll start making profits and what expenses you should expect to incur. This will help you get a better picture of exactly how much the business costs; it’s extremely hard to do that with a start-up.