|
The costs involved in starting and operating a franchise, including deposits or franchise fees that may be non-refundable, and costs for initial inventory, signs, equipment, leases, or rentals. It also explains ongoing costs, like royalties and advertising fees.
Ask about:
* continuing royalty payments
* advertising payments, both to local and national advertising funds
* grand opening or other initial business promotions
* business or operating licenses
* product or service supply costs
* real estate and leasehold improvements
* discretionary equipment, such as a computer system or a security system
* training
* legal fees
* financial and accounting advice
* insurance
* the costs of compliance with local ordinances, such as zoning, waste removal, and fire and other safety codes
* health insurance
* employee salaries and benefits
Starting your business may take several months. Estimate your operating expenses for the first year and your personal living expenses for up to two years. Compare your estimates with what other franchisees have paid and with competing franchise systems. You may be able to get a better deal with another franchisor. An accountant can help you evaluate this information. |
