Most of the people that I talk with have a dream, a dream to do what they love, love what they do. I hope you can relate. And that's why I help people explore franchise business ownership. Look, let's face it. Nobody wakes up today and says, “Hey, I wanna buy a franchise.” But a lot of people are very curious about it.
One of the most commonly asked questions I always get is “Stacey, how much does it cost to open a franchise?” So today I'm gonna share with you some of the things that you're gonna wanna consider if you too are interested in franchise business ownership. Yes, there are some startup costs that you're gonna need to factor in. Number one, if you're really serious about it, you're gonna want to hire a lawyer and an accountant to look at the franchise agreement and make sure that your business plan is set up for success.
Some of the hard costs that you'll need to factor in are the franchise fee, the royalty fees, and any other fees that the franchise may charge. Good news is that all of these costs are laid out in hard paper for you to review in a document called the FDD, the Franchise Disclosure Document. So there should never be any surprise or unexpected costs and you're going to know upfront in item seven exactly what costs you are gonna need to know about. Also, what kind of investment level will you need to think about when it comes to a franchise fee and will they range greatly?
It also really depends what franchise system that you get matched up with that could be a great fit for you. In general, I encourage my clients to factor in between $20,000 and $50,000 for a franchise fee. In regards to the royalty fees, those range as well. Almost every franchise that I work with has some kind of royalty, and don't worry . . . royalties are generally a good thing. There is a value in paying royalties, but expect to pay between 2% and 12%, usually on a monthly basis in regard to the royalties that go back to your franchisor.
Then there may be training fees. There may be marketing fees. There may be technology fees. Again, those will all be outlined in item seven of the FDD. Now a cost that's not outlined in the FDD that I want you to pay careful attention to is the cost of your time, because you can't just whip out a check and have a business up and profitable the next day. You're going to need to invest some time in getting your business up and running and you're going to want to think about what kind of business ownership do you want.
Do you want to be an owner operator where you're in there every day? Or do you want some kind of passive ownership? Will you have a management team and employees in place? So there are different franchises that work well for each of those different models. What's really most important is finding a franchise that's a great fit for you. One that matches your skills, your interests, your passion, and also your financial resources. I'm here to help you find a great franchise that is a great match.
Feel free to reach out to me anytime. And I'll guide you along our proprietary franchise roadmap system to help you find the perfect franchise for you. What other question do you have about franchising? I'm here to help.
What's Your Next? - Podcast
 | Author BioI’m Stacey Riska aka “Small Business Stacey”, your franchise placement specialist. I help aspiring business owners find the PERFECT franchise so they can get to the next level in life and business. |
