How much does a franchise cost?
Magic numbers
At an early stage of your franchise research journey, this one feels like the single most important – or perhaps the only – question you want answered! But the reply might resemble that old saying: ‘Well, how long is a piece of string?’ that is to say – it could be ‘anything’. That’s because the entry level costs to run a franchise really can range from a relatively small outlay (eg. under £10k) through to figures running in the hundreds of thousands upwards.
There are, of course, associated costs such as: do you need premises, staff, vehicles, uniforms? How much stock or equipment you will need to purchase to begin trading, and so on. All of these considerations will depend on the sector your franchise operates within. Be reassured that there’s financial help, though! It’s valuable to know that franchise-specialist lenders consider loans of up to 50%-70% of the funds required to launch your franchise.
The good news is there’s a franchise to suit all budgets, interests and ambitions – it’s all about finding the right fit for you! Learn more about low-cost franchise opportunities or browse the full directory to start exploring your options.
Sowing seeds, reaping benefits
It’s worth noting that the investment level is, generally speaking, indicative of what you will receive in return. That is, the strength and reputation of the brand name you are in partnership with, the level of training and ongoing support they provide and, not least, the amounts of turnover and profit you are forecast to achieve.
Continuous financial commitment
The franchise business model involves an ongoing, transactional relationship between franchisor and franchisee. To run the business, you’ll pay a management service or royalty fee – on a regular (probably monthly) basis. This will be either a fixed amount or a percentage of sales. Some franchisors may charge fees if you wish to renew your franchise at the end of the agreed term, but this should be stated at the outset in your original franchise agreement.
In conclusion
As always, the most clarity is to be gained from early conversations you have with the franchisor themselves. They should be as transparent as possible about the costs involved if they are taking you seriously as a future business owner. Download your copy of FranchiseInfo’s Beginner’s Guide to Franchising for a handy checklist of questions to ask!
Got questions?
It’s essential you understand the costs associated with investing in a franchise, as well as the range of funding options available to make an informed decision about your future in franchising. Visit a Franchise Exhibition to chat to expert advisors and lending providers face-to-face – tickets are free! Find out more about upcoming events & book your free ticket today.
