What is a Franchise Fee?
When investing in a franchise a buyer will most likely pay a franchise fee there is a LOT more to franchise ownership than this fee.
Our franchise development director says that "What is the Franchise Fee?" is the most common question asked by a potential investor. While this is one of the considerations it is definitely one of the least important items to look at.
The franchise fee is the initial fee charged by the franchisor to give a franchisee the rights to use the logo, systems, and start a business with those items. But, what you get for that fee with each franchisor does differ. Things to compare for that fee are:
How much training is included with this fee? Every system has different training, some may be at the franchisor's office, some may be online, and some may be at your place. A detailed outline of the training you should receive is included in the Franchise Disclosure Document in Item 11.
What items are provided? Do you get manuals? Most often you should get a Pre-Opening Manual and then also an Operations Manual. There may be other items that are neccesary to your business - which of those are provided and what must you pay for going forward?
Access to other franchisees or management?
What kind of ongoing support is offered with the system?