Understanding the franchising fees

A lot of people are put off from franchising because of the financial investment that has to be made. But usually, they are only put off because they don’t understand what kind of money is involved in starting a franchise. Here is a quick guide:

Deposit: Some franchises will charge a deposit. This is usually fully or partly non refundable. This money is used to look into the right location for your business and to find a property for it.

Initial franchise fees: This can vary and is only paid once the franchise is granted. This fee will be used to cover the training costs, costs of recruiting, and equipment that is needed and the costs of launching the franchise.

On-going franchise fees: This amount will vary and will depend upon a percentage of the gross revenue of a franchise. The amount of fees will depend upon the split of responsibility between the franchisee and the franchisor.

Advertising fee: These fees will be used for regional as well as national marketing and advertising for the franchise network.

It’s important to know where your money will be going when you begin a franchise. By looking understanding the fees, you can make an informed decision as to whether you can afford to begin a franchise.