Why in the world would I pay a franchise fee? This is question I often get as a certified franchise consultant.
A franchise fee is a one-time fee charged to a new franchisee when purchasing a new franchise. A franchise fee can range from a few thousand dollars to $ 50,000 or more and is usually paid at the time of signing a franchise agreement. In most cases, the franchise fee is non-negotiable, at least in the case of a single-unit franchise.
The most common benefits you receive in return for paying the franchise fee are inclusion in the system and rights to use a franchisor’s brand, trademarks, and marketing materials.
Franchise fees also typically include comprehensive training and ongoing mentoring to run the business and access to proprietary systems and business processes. You will have rights to national accounts or to use negotiated vendor products and services, software and operations manuals. In some cases, may also include location selection and build-out assistance.
While these are the more common things included with a franchise fee, sometimes franchisors will include other items and services such as grand opening campaign, computers, software, and supplies for the trade.
For assistance with your franchise search, contact me for more information on how I can help you along the way.
