What Does It Cost To Start a Franchise?
As the old saying goes, you have to spend money to make money – but just how much money?
Becoming a franchise owner means a lot of things, but above all, it means you must be financially prepared to take on the costs associated with opening a new franchise store, or in our case, restaurant. Here’s what you need to know as you begin preparing for your franchise ownership journey.
Initial Franchise Fee: This is the cost paid directly to the franchise itself. It covers all costs associated with the rights to the franchise’s existing brand name, trademarks, service marks and business model.
Training Costs: Consider what it’s going to run you to train yourself first. Remember, you’ll need to fly-in to attend training sessions with your new franchisor to learn all about the business system you’re about to be a part of. Think: airfare, hotel, food and other transportation costs.
Property Expenses: Oftentimes renovations are required in order to get your new franchise location up and running. These expenses might include demolition, construction, and even simple interior remodeling. That being said, you’ll also have to factor in the real estate costs themselves, and what it’s going to run you to rent or lease the space itself.
Equipment Costs: Depending on the franchise system you’re entering, you may be required to purchase specific equipment from the franchisor and affiliated vendors. This can include specific products or services, such as a POS system for inputting orders in a restaurant setting.
Additional Fees: Don’t forget about legal and accounting services, as well as the costs affiliated with securing certain business licenses to fill franchise requirements.
How do these stack up with Fazoli’s startup costs?
Generally speaking, there are two main facts or figures to know when considering opening a Fazoli’s restaurant: total investment capability and project cost contribution.
Total Investment Capability: As a general rule of thumb, we recommend that prospective franchisees have a total investment capability of $750,000 per unit.
Project Cost Contribution: We require that all prospective franchisees have the ability to invest a minimum of 20% of the total project cost from start to finish.
For more information about startup costs and what the Fazoli’s Franchise Disclosure Document (FDD) entails, contact Sam Nelson at 1-800-446-4368 or fill out our information request form online.
- Trusted and experienced leadership
- Strong brand reputation
- Stable and growing system performance
- High growth potential
- Attractive financial performance
- Operational & portfolio compatibility