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Posted on by Mark Fernandez

What are the total costs of buying into a franchise?

Are there any hidden costs? What’s in the fine print? How much money do I really need to start a franchise business?

Most franchisors charge an Initial Fee to cover some of the costs for setting the franchisee in business. On-going fees are usually charged weekly or monthly, as a percentage of the franchisees Gross Turnover or Profit, and in some circumstances as a mark up on goods supplied directly by the Franchisor. It is also becoming common to have the fee set as a fixed sum reviewed periodically. You must also take into consideration the following:

When considering to enter into a franchise it is critical that you do your homework and gather as much information as you can. The Franchisor will need to furnish you with a Disclosure Document that  outlines running costs of the business, however, if you don’t know what to look for and what questions to ask then you are leaving the door open for issues that may not arise in the short term, but they will arise. Buying a franchise business is so emotionally charged and is one of the biggest decision you will ever make….so take the time and do the numbers and have them checked by your accountant and your business advisor.

For more information Click here to contact Mark Fernandez, Director of Business Development Alliance

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