Understanding the cost to franchise your business is an important step in evaluating if you should franchise and selecting the right team and franchise development strategy. When evaluating the cost it’s important to understand that franchising is a “process” that takes place over years and that, in this article, we’re talking about (a) the franchise development stage where you take the legal and development steps necessary to call yourself a franchisor and start selling franchises; and (b) the franchise sales stage where you begin to market and promote franchise sales over the next twelve months.
The cost to franchise your business, generally, ranges from $18,500 to $84,500 for the franchise development stage, and $22,500 to $75,500 for the initial 12 month franchise sales stage. The cost will vary depending on the legal and franchise team that you work with, the industry within which your business operates, the organic reach of your brand, and the aggressiveness of your franchise sales goals. Spending more does not necessarily equate with better success and spending too little may lead to lost opportunity and unintended consequences.
Below we discuss the costs in more detail.
To learn more about franchising, the costs involved, and how to get started, give our team a call at (800) 976-4904 or by email.
The franchise development stage is the stage where you go from business owner and entrepreneur to franchisor. Its the stage where you work with a legal team to franchise your business and take the steps necessary to franchise your business, become a franchisor, and start selling franchises. During the franchise development stage, you should consider the following costs:
Total estimated cost to franchise your business during the franchise development stage: $18,500 to $84,500
To learn more about how to franchise your business, and the franchise sales marketing channels visit our Ultimate Guide to Franchising Your Business.
The franchise sales stage comes right after the franchise development stage and, as to many aspects, should be occurring side-by-side during the later part of the franchise development process. Although marketing and selling franchises goes beyond the scope of this article, its important that when you consider the cost of franchising your business you include a franchise sales budget for the first 12 months. Knowing how much you need to invest in franchise sales will, largely, be determined by the industry you operate in, the number of organic qualified prospects (i.e., existing customers and contacts) that are already interested in buying your franchise, the internal marketing capabilities of your own team, and, most important, the number of franchises that you want to sell.
Assuming that you are in a favorable industry that is not oversaturated and assuming that you have a realistic franchise sales goal of 5 new franchise sales (i.e., not sales to your existing organic contacts), you should consider the following aggregate costs over the initial 12 months:
Total estimated cost to franchise your business during the franchise sales stage (first 12 months): $22,500 to $75,500
Keep in mind that we are talking about a modest goal of on-boarding 5 new franchisees that are not already contacts in your funnel and that this is only an estimate. We’ve seen start-up franchisors sell far more with much less dollars and we’ve seen some brands spend far more without getting great results. You need to be strategic, build the right relationships and work with professionals who will help you avoid mistakes and wasted dollars.
Learn more about our fixed fee Franchise Launch Program. This fixed fee service program combines legal representation + franchise development and covers all of the steps involved in developing your franchise offering. if you have questions about whether or not franchising is right for you read our guide on Should You Franchise Your Business.
In this guide you’ll learn the basics of franchising, how to franchise your business, and how to win at franchising. We’ll also take a deeper dive into legal requirements for franchising and why they matter, steps to take before and after you launch your franchise, and even some tips on... read more
When considering expanding a business both franchising and licensing are possible options. In this guide, you'll learn the differences of franchising and licensing and understand how each will affect you. read more
Are you a successful business owner? Are you looking for ways to expand your business? If so, this article will provide the answers you need to decide whether franchising your business is the right step for you. In short, franchising allows you, the franchisor, to create a relationship among several... read more
Under federal law, prior offering or selling a franchise in any state, franchisors are required to disclose a franchise disclosure document (FDD) to their prospective franchisees. In addition to federal law certain states, including the franchise registration states, require that franchisors register their FDD with the state. The legal documentation... read more
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?... read more
Key strategies to accelerate franchise growth for startup and emerging franchisors In this webinar, franchise attorney Charles Internicola and Nick Powills, founder of No Limit Agency and 1851 Franchise, discuss key strategies to accelerate franchise growth through PR and digital media. Some topics include: Steps franchisors should take when it... read more
One of the biggest issues for emerging franchisors is not having a plan for insurance and system-wide protection. What do emerging brands need to know when they're starting off, who should they rely on, and how can they plan ahead? Get an insurance game plan to protect your franchise system... read more
Key strategies for developing the right logo & trade dress to drive franchise growth with branding and design expert Dan Antonelli. Dan is the author of ‘Building a Big Small Business Brand’ and is the creative director of the branding firm KickCharge Creative. Learn how to drive franchise growth and... read more
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.
An attorney client relationship is not established by submitting this initial contact information.