Business Franchise Opportunity | Overview of Basic Costs

Consider These Costs for any Business Franchise Opportunity

When you're trying to calculate the cost of a business franchise opportunity, the first thing to realize is that not all franchises are created equal. That is, the cost of a given franchise will vary depending on a number of factors, including the size of the franchise, required equipment, and other factors we'll address here. All of these items must be considered when figuring out the cost of a franchise.

1. Franchise Size
Generally speaking, the larger the franchise, the more it's going to cost. A stand alone brick-and-mortar business will naturally require a much higher investment amount than a little vendor kiosk you see at the mall. A McDonald's restaurant, or a Meineke Muffler shop will cost a lot more than a seasonal hot dog stand.

2. Equipment
Equipment costs will factor into the overall franchise cost. A franchise requiring more equipment, for example a printing business or an auto shop, will cost more than a franchise opportunity that's less equipment intensive, like a copy center.

3. Employees
As for ongoing costs to operate your business, if your store requires employees, as opposed to a one-person operation, you'll have more costs since you have to factor payroll into your costs. A business you run by yourself if have less overhead in this regard.

4. Supplies
What supplies will your franchise business need? The more supplies, naturally the bigger the investment in terms of initial capital and ongoing costs to operate your business. Comparing a Burger King to a hot dog stand, the Burger King requires more supplies: Hamburger patties, buns, lettuce, tomatoes, fries, chicken patties, and so on cost a lot more than frozen hot dogs!


This is just a very basic overview of course, but the point is that when you are considering a business franchise opportunity, one thing you need to do is figure out what level of investment you're able to make in the business. This will help you determine the type of franchise you can afford and thus help in your overall decision about the specific franchise businesses you're able to consider. Thus, if you can only invest a relatively small amount, then you can only target the smaller franchises; larger amounts allow you to consider some of the more expensive franchises.

Remember to take into account all of the various costs of a franchise. This includes the initial startup costs, cost of the land, building, and equipment costs, and the ongoing operation costs required to run the business. A franchise buy is a long term commitment so keep that in the forefront of your mind when considering various business franchise opportunities.