What costs are involved in acquiring a franchise?
If you’re determined to acquire a franchise, consider all associated costs. These include lump-sum fees, royalties, marketing, software, and other franchise fees. Each brand has specific kinds of fees that differ in the amount. You must look into a particular brand and learn what kinds of costs you can expect to cover.
- Lump-sum fee. It’s a certain payment you have to cover in order to use a brand trademark. Lump-sum fee is paid one-time. Each brand has a different sum for this right.
- Royalties. It’s a monthly payment during the whole time you operate a franchise. They are estimated on the basis of your franchise’s income. Usually they range from 4% up to 12% depending upon the brand you choose.
- Marketing fee. Brands are eveloping through advertising campaigns, creating marketing solutions and building up a reputation. Thanks to this, franchisees don’t have to be bothered with developing their franchise and attracting customers themselves. Therefore, by becoming a franchisee, you get ready-made marketing strategies and need to make small payments for them.