The estimated cost to franchise your business ranges from $26,000 to $84,500. Below we provide a detailed breakdown of the costs involved in franchising a business, plus what to expect in your first year of franchise sales.
Estimated Cost to Franchise Your Business
The estimated cost to franchise your business ranges from $26,000 to $84,500. This covers everything required to go from where you are today — a business owner ready to expand — to becoming a franchisor who is legally authorized to offer and sell franchises.
In addition to these legal and compliance costs, you should also plan for first-year franchise sales and development expenses. These typically range from $22,500 to $75,500, bringing your total first-year investment to approximately $48,500 to $160,000.
Actual costs will depend on the franchise team you work with, your industry, and the level of support you need.
Legal Costs: Franchise Disclosure Document (FDD) Development
Estimated Cost: $15,000 to $45,000
Your FDD is the legal backbone of your franchise system and includes all legal agreements between you and your franchisees. As a legal document, your FDD must be prepared by an experienced franchise lawyer. During this process, your legal team should:
- Advise on development structures (single-unit vs. multi-unit).
- Develop Item 19 financial performance representations.
- Register and protect your trademarks
- Establish your franchisor corporate entity.
Operations Manual Development
Estimated Cost: $0 to $30,000
Your Operations Manual is the confidential manual that you will provide franchisees after signing. Although not disclosed in the FDD, the manual should be completed during the franchise development process.
Some franchisors prepare their own manuals, while others hire professionals. Costs range from DIY support to complete, on-site development services.
Financial Statement Preparation
Estimated Cost: $2,500 to $5,000
As part of the franchise development process, you will establish a new corporate entity (e.g., XYZ Franchising, LLC). This entity must issue audited financial statements, even if brand new. A licensed CPA will audit and certify the financials for your FDD. Learn more about financial statements that must be included in your FDD.
State Filing and Registration Fees
Estimated Cost: $1,000 to $4,500
As part of the franchise launch, you’ll pay fees for:
- Incorporation ($300 average).
- USPTO trademark filings ($250 per class).
- FDD registration fees ($250–$750 per state).
This estimate will vary depending on the number of trademark registrations and FDD filings. Most start-up franchisors only initially register their FDD in 2 to 4 franchise registration states.
Costs for First Year of Franchise Sales
Estimated First Year Sales Costs: $22,500 to $75,500
Although not technically a cost to legally franchise your business, every new franchisor should budget for sales. Franchising is scalable, and building sales takes years. A realistic first-year budget should include:
- Franchise Sales Website: $2,500–$15,000
- Franchise Brand Positioning: $0–$2,500
- Sales Presentations: $0–$3,000
- PR and Validation: $15,000–$25,000
- Paid Advertising: $0–$20,000
- Broker/Conference Participation: $5,000–$10,000
Your actual spend will depend on sales goals, organic brand interest, and competitive pressures.
The Myth of Million-Dollar Franchise Costs
Some websites suggest franchising costs $500,000–$1M+. These inflated figures often bundle multi-year marketing, staffing, and technology into “franchise cost.”
The reality: the legal and compliance foundation typically costs $26,000–$38,000 through fixed-fee Franchise Launch programs. From there, you can strategically scale marketing and systems over time.
Want to go deeper? See our companion guide: What is the True Cost to Franchise Your Business? → Learn about hidden costs, budgeting pitfalls, and smart strategies to invest your dollars wisely.
FAQs About Franchising Costs
Typically between $26,000–$38,000 for the legal foundation. Sales and marketing may add $20,000–$75,000 in year one.
Legal fees for FDD drafting, franchise agreements, and registrations typically range from $15,000–$45,000.
Our flat-fee Franchise Launch legal programs is $26,000.
Because they include optional multi-year budgets for PR, staffing, and technology. The actual legal foundation costs much less.
Yes. With the legal foundation in place, you can add marketing, technology, and broker strategies gradually.
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