If you’ve ever looked at a franchisee fee and raised your eyebrows,
you’re not alone. Starting fees may range into several thousand
dollars, and when you're making such a big decision, it's only
natural to want to confirm you're getting the better end of the
An initial fee can seem expensive without any context behind it, so
if you want to determine whether the figure is too high, you’ll
have to first check all aspects of the franchisee thoroughly. The
best way to review a franchisee fee is by comparison, particularly
to the cost you’d have if you were starting the business on your
own, outside of the franchise.
The Price Tag of Knowledge
While you can make an educated guess after opening a few units, you
may not really know the right kind of location for your business at
first, before you’ve made a costly mistake. Same idea holds true
for employees. Sure, after you’ve hired, tried to train, and fired
some, you’ll have an idea of what kind of employee you need, but
before that you'll waste time and money.
Marketing is another expensive angle. You'll need to invest in
marketing campaigns to attract customers to your business. But it
can be expensive when you're on your own, and you'll also have to
figure out what works for your business and what doesn't.
With a franchise, the guesswork on marketing, locations and
employees is removed. The franchisor has systems in place for
training, marketing and location selection, allowing you to make
the right decisions from the get-go. And even if you're struggling,
a good franchisor will have support and guidance available to help
Before you buy a franchise, you can ask to see where your franchise
fee goes. Franchisee fees may go toward improving training and
support procedures and systems as well as developing products and
services and its marketing. While the fee may seem high to you,
it's going toward helping you run and maintain your business, which
is truly priceless.