The franchise fee
The initial franchise fee is the upfront fee you make when buy the franchise.
Set up costs
As a franchisee, you’re responsible for getting your business ready to trade. This could include refurbishment and branding of premises, or the hire or purchase of vehicles or tools.
The on-going fee is also known as a management services fee, or royalty fee.
This fee covers the cost of marketing and promotional activity for the whole franchise. Money is paid by each franchisee into a pot which is then used to fund promotion of the brand, which you’ll ultimately benefit from.
Franchise opportunity costs
Depending on the type and size of the opportunity all the above franchise costs and fees vary.There really are franchises out there to suit all types of entrepreneurs and sizes of pockets.
Finally, If the franchise that you’re buying in to has a highly-perceived reputation, the initial franchise fee will be greater. If you’re just starting out and require a high-level of support from the franchisor, the on-going fees will be increased to reflect the extra efforts.