skip to content
blog home Start a Franchise How Much Should It Cost To Franchise Your Business: $10‚000‚ $30‚000 or $150‚000?

Answer: $30‚000 to $35‚000* (See‚ Detailed Note Below)

So‚ this question comes up often and‚ for good reason‚ is a critical starting point for many start-up / would be franchisors. However‚ far too often‚ the answer that is given to this question is vague and – in my opinion – followed by misinformation that is designed to either make this process seem much more complex than it really is or‚ on the other end of the spectrum‚ overlook necessary steps that must be followed in the franchising process. That is‚ many times start-up franchisors are “sold” unnecessary franchise development services that do not add value (i.e.‚ $150‚000) or services that are woefully inadequate and will only launch a franchise system that gets you in trouble or‚ simply a ticket‚ to much higher legal fees (i.e.‚ $10‚000).

Let me be a little more precise and share (in general without revealing any confidences or identities) a conversation I had with an extremely successful business owner (with 4 successful locations) interested in franchising.  Naturally‚ he is interested in franchising his business and he contacted me after he received a “quote” from a franchise development company.  The quote was for $140‚000.00 and involved the following:

  • Business Evaluation and Expansion Recommendations – This service involved the consultants review of the business‚ evaluation of market trends and recommendations for expansion‚ i.e.‚ franchise or license. (By the way click here to read our guide about the differences between franchising and licensing). $40‚000 was the quoted cost for this service. That is‚ before getting started‚ the consultant wanted $40‚000 to evaluate the business and recommend whether or not franchising was right for them and whether or not licensing was an option.

MY TAKE ON THIS – Well‚ it is a waste of money.  If you are a successful business owner with four successful locations‚ I can assure you that you understand your business and industry better than 99.9% of every person on this planet.  Deciding whether or not franchising is right for you‚ requires some thought and information and not a $40‚000 consultant report.  Franchising is all about organic expansion and thoughtful growth. To learn more about franchising and what it means to franchise your business‚ read “Is Franchising The Next Step for Your Business” and The Ultimate Guide to Franchising Your Business (they are designed to inform and‚ best of all‚ they may save you $40‚000).

  • Franchise Development ServicesAs to the franchise development services‚ this would be franchisor was told that the cost was $100‚000.  This cost included FDD development‚ operations manual and other unspecified consulting services.  The consultant mentioned that they were not lawyers but that they would have their own lawyers prepare everything.

MY TAKE ON THIS – Both as a franchisor myself (I also manage a national franchise company) and franchise lawyer‚ I take issue with “development companies” selling attorney services.  The issue is a business one and that is‚ if the “franchise lawyer” preparing your FDD works for your development company then he or she does not work directly for you and is not directly accountable to you. In fact once you sign up you will learn that the franchise lawyer who will be helping out will “disclaim” or tell you that they are there just to assist as to the “form” of your documents but not the “substance”.  Basically if something is wrong‚ the lawyer will not be standing behind your FDD.  With regard to the operations manual‚ assistance is great but‚ again‚ understand that no one better understands your business better than you.  You need to prepare your operations manual and a good franchise lawyer can assist you with the structure and getting you in the right direction.  Final note‚ $100‚000‚ sounds way to high.

Franchising is a natural progression in the expansion of your business. The franchise development process is critical and far too often shrouded in amorphous and unclear services and service options.  On the other end of the spectrum the $15‚000 development program (something that I will discuss in a future article) is‚ more often than not‚ a ticket to a future disaster‚ or simply the entrance fee to much higher fees (for services that you don’t yet know you need) later on.

I believe that $30‚000 to $35‚000 is the answer.  Now you need to evaluate whether or not that is the right fee for you.  The answer depends on “value”.  That is‚ what are valuable franchise development services that will assist in taking your business from local success to regional or national franchise.  I believe that we have the answer to the value question and this answer is based no only on my experiences as a franchise lawyer but also as a franchisor. Learn more about our step-by-step franchise law and franchise development program.

Let me know what you think.

Related Articles:

By Charles Internicola August 6, 2013

Franchising Guides

The Ultimate Guide to Franchising Your Business

New to franchising? Do you want to learn more about franchising your business, where to start, the steps, and how to know if you are doing it right?

Learn More

Is Your Business Franchisable and Should You Franchise?

Franchising may be the next big step for your business and represents an opportunity to grow your brand. So, how do you know if franchising is right for you? How do you know if your business is franchisable and, if it is, whether or not you should franchise your business? To answer these questions you must evaluate whether or not your business is franchisable and, if it is, whether or not your individual goals and your business goals align with franchising and establishing a franchise organization responsible for on-boarding, training, and supporting franchisees.

Learn More

Licensing Vs. Franchising

When considering expanding a business both franchising and licensing are possible options. Each option however comes with different rules and regulations. Prior to moving forward with franchising a business or licensing a business it is important to understand the differences and how each may have an affect on you.

Franchise Lawyer Charles N. Internicola wrote “Licensing versus Franchising” for the very purpose of allowing successful business owners to understand the difference between licensing a business and franchising a business.

Learn More

Guide to Selecting a Franchise Lawyer

If you have questions about franchise lawyers, what they do, how they can help, the cost, and how to select the right franchise lawyer for you, then this guide will help.

Franchise lawyers advise and represent individuals and businesses on legal issues that involve franchising a business, preparing an FDD, filing and renewing FDD registrations, buying a franchise, and litigation involving the franchisor and franchisee relationship. The role of a franchise lawyer varies depending on whether he or she represents the franchisor or the franchisee.

Learn More

Item 19 Financial Performance Representations

Check out our guide where we discuss how to plan and properly disclose Financial Performance Representations in your FDD.

Learn More

Franchise Sales Compliance Guide

Are you a franchisor or a part of a franchise sales team? Do you want to learn more about franchise sale compliance and ensure that your sales practices comply with franchise laws and are consistent with best practices? Then this guide is for you.

In this guide you’ll learn the fundamentals of franchise sales compliance including the franchise laws, regulations, and best practices that your team should have in place for every franchise sale.

Learn More
Close Overlay

Let’s Talk

With services to make your growth strategy simple, cost effective, and with a team excited to help you, let’s talk about how we can help grow your business.

Fill out the following form and we’ll contact you as soon as possible. To reach our team directly, give us a call at (800) 976-4904.