What is the cost of buying a franchise?

by Colin Chadwick QFP – Director of Franchise Development, Royal Bank of Scotland Group

The cost of buying a franchise varies depending on which franchise opportunity is selected. A franchisor will usually require the franchisee to pay an initial licence fee at the outset. The cost of this can vary depending on the brand, the sector and the complexity of the business. Thereafter there will be on-going management service fees. In return, the franchisor has an obligation to support the franchise network, notably with training, product development, advertising, promotional activities and with a specialist range of management services.

In addition to the costs of buying into the franchise and the ongoing payments that have to be paid to the franchisor, there will be the running costs of the business, including rent, rates, wages, materials, repairs, capital expenditure on equipment and vehicles (and also their running costs), professional fees to accountants and solicitors, tax, National Insurance and VAT, local marketing costs and so on.

Read more on franchise funding

About the author

Colin Chadwick QFP is the Director of Franchise Development for Royal Bank of Scotland Group. With over 30 years experience in Banking he is a Qualified Franchise Professional and a regular speaker at franchise exhibitions and seminars.

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