FAQs
Answers to frequently asked questions about choosing, starting, and running a franchise business
Franchise FAQs
Prospective business owners who are looking for sound investments often ask, “Are franchises a good investment?” The short answer is yes—if you find the right opportunity for you. … Research suggests that franchise businesses overall have a startup success rate of greater than 90% and better longevity.
Franchise startup costs can be as low as $10,000 or as high as $5 million, with the majority falling somewhere between $100,000 and $300,000. The price all depends on the industry, location and type of franchise.
A franchise fee is what a prospective franchisee owes to the franchisor for the rights to use the franchise brand and franchise system. Typically the franchise fee refers to a one-time payment paid in the beginning of the relationship. … You must also pay all required fees to the franchisor.
The average or typical starting royalty percentage in a franchise is 5 to 6 percent of volume, but these fees can range from a small fraction of 1 to 50 percent or more of revenue, depending on the franchise and industry. A fixed sum royalty fee.
Deciding which franchise is right for you is a huge decision. The right business should not only interest you, but the initial investment amount must fit into your budget and it should enable you to live the lifestyle you desire (do you want more free time, more money, control over your work environment?).