Before you get too far down the road to franchising your business, you’ll need to carefully consider the costs involved and make sure you’ve got proper financial backing in place. While the amount of money you’ll spend on franchising your business will depend on numerous factors, there are general guidelines that will help you estimate your costs.
General Costs to Franchise Your Business
Note that many of these costs can be minimized and/or consolidated through effective planning.
- Federal Trademark/Service Mark Registration: $750
- Initial Drafting of Franchise Disclosure Document and Franchise Agreement: $5,000-$35,000
- Initial Drafting of Franchise Operations Manual and Training Manual: $5,000-$30,000
- Attorney Review of Franchise Disclosure Document, Franchise Agreement, and Franchise Operations Manual: $5,000-$25,000
- Filing in Registration States: $500-$15,000
- CPA-Audited Financial Statement: $2,000-$4,000
- Web/Graphic Design and Marketing Collateral: $5,000-$20,000
- Payroll of Key Personnel During Development Phase: $50,000-$250,000
- Minimum Net Worth Post Development to Avoid Impound Filing: $150,000
One of the biggest mistakes that new franchisors make is underestimating the amount of money necessary to successfully launch a franchise. Proper capitalization will go a long way toward ensuring the success of both you and your franchisees. While we do not make any claims regarding how well you’ll be able to franchise your business, our consulting services and products can help plan for and budget your expenses. Find out more when you contact us.