08 Sep, 2017

Franchise Start Up Costs

There is great variation of the franchise start up costs from one franchise to another. This is the reason why there are some franchises that are categorized and termed as the low cost franchises. Generally, it is costly setting and starting up a business. It may cost you more than you had prepared for. This is the reason why most people prefer franchising or buying a business for sale bay its owner. The costs will vary depending on whether you buy new franchise or you buy an existing franchise. You should understand that franchising refers to the condition in which the owner of business sells its business name to another person referred to as the franchisee. In essence, the franchisee has to trade in the name of the franchisor; it has to sell the same products and offer same services to those of the franchisor. The franchise start up costs mostly include the following Franchise Fees: Some franchisors require that the franchisees pay some franchising fees. You should talk with the franchising team of the company that you want to franchise with so as to learn how much the franchise fess is. Some franchisors offer the chance of negotiation for the best deal so as to reduce the franchise start up costs. If you are not good in bargaining it would be wised if you hire business consultant or lawyer so as to offer the best bargain on your behalf. Franchise fees for small businesses can range from $5,000 to $, 100,000. The franchise fees for well known fast food restaurant franchises can cost between $ 250,000 and $1, 000,000. Terms of lease: The terms of lease may be complex and so it is highly recommended that you hire a professional to offer you the best advice on the issue. You should hire a franchise broker, lawyer, business consultant or real estate broker that has experience in those matters to assist you in negotiating for the best terms of lease. The franchise start up costs for long leases are in most cases slightly higher than the franchises that have lease terms that cover short duration. Royalty Fees: Some franchisers require that the franchises should pay some royalty fees. The royalty fees may be paid monthly or after every three months depending on the franchising agreement. Most people tend to avoid those franchises that require payment of royalty fees but there is nothing wrong with paying for the same if the business is making profits.