Estimate The Cost Of Franchising

No business can afford financial surprises. You must know if you can afford the costs of franchising before you begin the process. You cannot collect any fees or royalties until you have legally established your franchise. When you’re developing your franchise you’ll incur costs with lawyers, accountants and consultants. Once you have the franchise formed, you’ll incur the cost of advertising and trademark protection. It’s reasonable to expect to spend between $25,000 and $40,000 developing your franchise. The majority of this is due upfront. You must make sure your current business operations can sustain this kind of cash outflow. Expect these minimums as you establish your franchise:

• Incorporation of holding company for your franchise: $100 - $300
• Trademark $1,500 - $3,000
• Creation of UFOC $15,000 - $20,000
• Audited financial statements: $2,000
• Registration of UFOC in home state: $250
• 6 months advertising with online franchise sites: $6,000
• Addressing Infringements: $500 each

Several of these costs are recurring. The UFOC has to be updated and registered annually. The financial statements may have to be audited annually. Infringements have no timeline and advertising is ongoing.