Generally, the cost of the franchise itself is related to the projected profit of the small franchise business. The front-end franchise fee (what you pay up front) will be a lump sum. On top of that, you'll likely pay a royalty fee (typically ranging from 3% to 8%) plus an advertising fee. If the small franchise business needs a store-front, you'll have lease fees or building or land purchase fees. Depending upon your business, you might also need to budget for equipment rental or purchase, signs, opening inventory, and working capital to pay the ongoing salaries and expenses until you generate a profit. Know your costs and what you need in terms of financing.

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