If you are wanting to start a franchise, it can be difficult to know how much money you need. Not all franchisees have the same requirements for their potential owners, and many of them vary in size, location, and initial investment costs. That said, there are some commonalities across different franchises that can help you get a general idea of what your startup costs will be like.
Franchise Costs Depend on the Industry
Most franchises start at around $150,000. This is the case for businesses in many different industries, from pizza delivery to pest control and home care services. The more specialized your business model is, the smaller of an initial investment you will need. It also means you might not get as much exposure or profit if other people do similar work nearby.
The larger the franchise location, such as a gym branch with multiple floors and equipment rooms, generally requires more startup costs than a single storefront establishment with just one floor that offers fitness classes. You can invest less by starting small and expanding once you have built up some cash flow, but this could take longer to do on having fewer resources upfront.
Some franchises may be less expensive to start up than others. If you are looking at a franchise with lower startup costs, it could be because they charge monthly royalties instead of requiring upfront payment for the rights to their brand and business model. Franchises that offer to finance may also seem more affordable on paper. Still, you have less money available in your pocket once the loan is repaid or other expenses come about within the company.
Franchise Fees For Your Business
Franchise fees generally range from $25,000-$250,000 depending on location size and industry type, so do not overlook this cost as it will easily eat up 20% of your funds if you have a small budget!
The most expensive franchising businesses require high-volume purchases, such as fast food and gas franchises.
The most expensive franchising businesses require high-volume purchases, such as fast food and gas franchises. Some of these brands may charge upfront fees in the millions before you get to purchase any supplies or equipment, which is why it’s important to have a sizeable amount saved up for this type of investment!
Ways To Save on Franchise Costs
Calculate your monthly expenses first with our easy budget calculator to see how much you can afford to invest in a franchise business without putting yourself at risk financially.
Some people save money on startup costs by joining an existing franchisee group where they share their knowledge about the process and provide assistance along the way, so there’s no need for costly mistakes.
Another way to save on franchise costs is by buying an existing franchise from a previous owner.
Find out how much you can afford to invest in a business without putting yourself at risk financially with our easy budget calculator, or join an existing franchisee group where you share knowledge about the process and provide assistance along the way, so there’s no need for costly mistakes!
You might also be able to buy an existing franchise from a previous owner who has already started their business. Doing this will help cut down on startup costs because it usually comes with established problems that have been worked out beforehand, such as branding and marketing strategies.