The costs are very different from a system, if this system is comprised of fixed and revenue-based fees. The size of the allocated territory or the new business play in the calculation of costs play an important role. Whichever which franchise idea you will choose, you have to pay fees.
Unique Franchise Entry Fee
The entry fee is one normally carried out at every franchise partnership. It is used to cover the costs of the respective performance of the franchisor.
The franchisee pays for the right to use the brand name and, for example, manufacturing techniques, and for the training and consulting services. Amount between 5,000 and 50,000 euros, depending on the type of franchise are realistic.
The Working Capital
These amounts cover costs of opening stocks and the daily expenses. The period until a new company carries himself can be between three months and two years, depending on the size and type of the new company.
The total investment is made up of the entrance fee to the franchise system, the cost of the structure of the company (such as real estate purchase or lease, business equipment, IT equipment, any equipment, computer programs, inventory, etc.), regulatory fees and capital working.
The current franchise or license fees are usually deducted as a percentage of net sales of the franchisee. They absorb costs for the use of the name, training, brand and site protection, advertising, development of the system and consulting services.The current fees are usually between 5 and 15 percent of net sales.
Some franchisors are in addition to the franchise fee costs for national marketing and advertising campaigns. Some franchise systems have additional administrative costs, for example, for a centrally managed bookkeeping.Costs for equipment, rent, lease costs, insurance, salaries, etc. are of course continuously and must be scheduled in advance. Anyone who wants to start their own needs, about the ongoing costs incurred as well as the start-up costs, would be good to be aware of this.
Every entrepreneurs should know before signing the franchise agreement, what to expect. In addition, always each one should remember that the rates for the repayment of loans are due!