What are the costs associated with operating a franchise.

Answers

Answer 1

7 Common Costs Associated with Operating a franchise

Exactly how much a franchise costs is different for every franchise company out there, but most of them have similar startup costs. While the franchisor will help you with some of these costs — maybe through deals it has with preferred vendors or by lending you the money — the onus will be on you to come up with the funds on your own. And it’s not just funds to build and open your franchise, you will also need funds to run it until it becomes profitable.

Let’s take a look at some of the most common costs associated with opening a franchise.

Franchise Fee

When opening a franchise, it’s important to remember that you are essentially “renting” the brand from the franchise. That brand comes with a lot of support and recognition, but you still have to pay for the privilege of being associated with it.

Franchise fees can be as little as $20,000 or as much as $50,000 or even more. The amount of the fee usually depends on how much you have to do to get the franchise up and running. Franchises that require you to build a location will be more than a mobile or home-based franchise, for example.

Your fee will usually cover the cost of your training and site selection support, hence why the fee is higher for businesses that require a location. Exactly what the fee covers is different for each franchise. Sometimes it will just act as a licensing fee for the rights to use the brand. When you are doing your initial research, be sure to find out exactly what your franchise fee covers.

Legal and Accounting Fees

These fees are on you, of course, but they are well worth it. Any person who is considering purchasing a franchise should absolutely consult with an attorney who is familiar with franchise law. The attorney you hire can review the franchise disclosure document with you and go through the franchise agreement to make sure it’s fair.

Each attorney will charge differently for this and it will largely depend on how much time your attorney has to spend on the documents, but you’ll probably have to budget between $1,500 and $5,000 for this.

It’s also a good idea to start working with a qualified accounting firm as soon as you decide to purchase a franchise. An accountant can help you set up your books and records for the company and can also help you determine how much working capital you’ll require to get your business set up and have it run until it becomes profitable.

Working Capital

Speaking of working capital, this is the amount of cash that is available to a given business on a day-to-day basis. It’s crucial to have enough working capital to cover a given length of time. This could be just a few months, or it could be a few years. It depends on how much time the business will need to start bringing in enough revenue for it to run.

Franchisors do generally provide an estimate of how much working capital you’ll require, but you should back this up with your own research and do your own calculations with the help of your accountant. Talk to other franchisees in the system about how much they needed.

Build-Out Costs

Build-out costs include constructing the building and purchasing all the furniture, fixtures, equipment, signage and anything else related to the building such as architectural drawings, zoning compliance fees, contractor fees, decor, security, deposits, insurance and landscaping. Your franchisor will give you an estimate of build-out costs, which vary widely between franchises.

If you choose a home-based franchise, obviously there will not be any buildout costs associated with it, but there may be other expenses like vehicles.

Supplies

These are all the things you require to run your franchise. Restaurants will need food, of course, but they also need plates, cutlery and napkins. Other franchises will need different things to offer their services. Your franchisor can give you a list or estimate of what you will need to run your franchise.

Inventory

If you are purchasing a retail franchise or some other kind of franchise that sells products, you will need inventory. This is another cost that will vary widely between franchises, but your franchisor should be able to help you with estimates. You might have to purchase between $20,000 and $150,000 worth of inventory depending on the business.

Travel and Living Expenses During Training

Franchisors will provide training for franchisees and often the franchisee’s management team. While the training itself is usually covered by the franchise fee, the travelling and living expenses to go to a franchise’s headquarters for that training may not be covered. Often, training runs from a few days to a week or so and is followed up with more training back at the franchisee’s location.

You’ll want to determine whether travel and accommodation are covered by your franchisor and, if not, work out how much the training related expenses will cost you.

Related Questions

The benefit of a mutual fund for investors is that.

Answers

Answer: investing in mutual funds is diversification

Explanation:hope this helps :3 Please mark me brainliest

A firm that earns less than 70 percent of revenue from its dominant business and has direct connections between its businesses is engaging in ____ diversification.

Answers

A firm that earns less than 70 percent of revenue from its dominant business and has direct connections between its businesses is engaging in ____ diversification. The answer is Related Constrained .

Acme, Inc., bought land and a building for $150,000. Acme plans to use the building for 20 years and then sell it. What is the useful life of the land

Answers

Based on the term of usage for the land by Acme Inc., the useful life of the land is 20 years.

What is the useful life of the land?

The useful life of an asset refers to the number of years or periods that the company that acquired the asset, plans on using it.

Acme Inc. in this scenario, plans on using the land for 20 years before they sell it. The useful life must therefore be the 20 years.

In conclusion, the useful life is 20 years.

Find out more on the role of the useful life at https://brainly.com/question/24194507.

The demand for air travel in the tourism industry tends to be relatively ______. Thus, small _____ in air fares will result in relatively _____ in air travel.

Answers

Demand for air travel in the tourism industry tends to be relatively elastic and as a result, the small reductions in air fares will result in relatively large increases in air travel.

What is a demand?

It means the quantity of consumers that are willing to buy products at various prices during a given period of time.

The demand for air travel is also affected by price which is asserted by law of demand that stated "the higher the price, the lower the quantity demanded.

Answers

The person will pay more than the regular $50, he will pay $50.85 for the jeans that he brought for the with the credit card.

What is credit card?

A credit card is a payment card that is issued to users to inform them of their need to pay a merchant for goods and services based on their outstanding debt.

The rebate of 55 days are given to the credit card holder for the repayment of money that he purchased with the help of credit card.

In the given case, the customer will pay $45 for purchasing the shoes of $50, with the help of credit card. He makes the payment of $45 by the credit card.

He will incur the interest at the rate of 13% on the regular price of $50, because the limit of 55 days is crossed.

[tex]\$45 \times 13\% = 50.85[/tex]

Therefore, the person will pay more from the regular price of $50.

Learn more about the credit card, refer to:

https://brainly.com/question/27350251

#SPJ1

What two outcomes would be considered part of the feedback loop in the communication process?.

Answers

Feedback is the state in which an output or loop response affects or influences an input or update.

What is Feedback Loop?

Feedback loop is an ongoing process where you listen and talk to your customers, and then make changes based on repeated evaluations.

It means starting in a place of humility, knowing that there is always room for improvement.

The two outcomes that would be considered as part of the feedback loop in the communication process are:

A consumer uses a car as a result of their interaction with a salesperson.A retailer notices an increase in sales following its purchase of advertising in Sunday's paper.

Thus, These are the two outcomes that would be considered as part of the feedback loop in the communication process.

Learn more about feedback loop here:

https://brainly.com/question/2902510

#SPJ1

A small retail center that is usually located along a major road and consists of small businesses is known as a:

Answers

A small retail center that is usually located along a major road and consists of small businesses is known as strip center.

What is a strip center?

A strip mall or strip center serves as a small retail shop or store that are arranged in a row, with a sidewalk in front.

This arrangement are typically developed as a unit and have large parking lots in front.

Learn more about strip center at;

https://brainly.com/question/17320867

Under the _____ concept, the company carefully integrates and coordinates its many communication channels to deliver a clear, consistent, and compelling message about the organization and its brands.

Answers

Under the Integrated Marketing Communucation concept, the company carefully integrates and coordinates its many communication channels to deliver message.

What is Integrated Marketing Communication?

Integrated marketing communication is seen as the process employed by organisation to unify marketing communication means like public relations, social media, audience analytics, and advertising, into a brand identity that remains consistent in all media channels.

Therefore, the answer is Integrated Marketing Communication.

learn more about Integrated Marketing Communication: https://brainly.com/question/9696745

#SPJ1

What type of information is typically communicated in the information flow from the store to the buyer

Answers

The type of information is typically communicated in the information flow from the store to the buyer is Inventory information.

What is Inventory information?

Inventory information serves as an accounting term that describes the set of of items, component parts and raw materials that the company uses in production or sells.

Therefore, Inventory information let us know information flow from the store to the buyer is Inventory information.

Learn more about Inventory information at;

https://brainly.com/question/24868116

As the technology manager for your firm, you have been tasked with identifying options for cloud-based software and hardware that will be hosted by an external vendor. In addition, the firm wants control over the operating system, underlying applications, and some of the software packages. Based on these specifications, you will be evaluating _____.

Answers

Based on making specifications, on identifying options for cloud-based software and hardware, you will be evaluating Cloud computing.

What is Cloud computing?

Cloud computing serves as the process involving delivering of hosted services over the internet.

Therefore, Cloud computing involves making different services through the Internets, such as data storage.

learn more about Cloud computing at;

https://brainly.com/question/16397886

#SPJ1

Publishers in an ad network (typically media sites) have to share ad revenues with the network. What benefit does an ad network provide to make it worth sharing these revenues

Answers

The benefit that ad network provide that makes its worth sharing with these revenues is because the publisher does not have to coordinate advertising with multiple search engines.

What is an ad network?

Also called an advertising network, is a firm's services that helps to connects advertisers to websites that want to host advertisements.

This, these publishers share ad revenues with the network because the publisher does not have to coordinate advertising with multiple search engines.

Answers

in you borrow money to pay for an item your interest

According to the phillips curve, policymakers would reduce inflation but raise unemployment if they.

Answers

Answer:

decreased the money supply

Explanation:

What tends to happen to a nation that increases its participation in an open economy with an international sector?.

Answers

Generally, nations that engage in open economies export and import products with other countries more easily.

What is an open economy?

Open economy is an economic term that refers to an economic system in which two or more countries maintain an exchange agreement of goods or services.

The open economy includes the transfers and reception of:

Goods.Services.Technologies.Others.

Learn more about open economy in: https://brainly.com/question/13505968

Which of the following is the BEST reason to use cash for making purchases?

Answers

Cash makes it easier to budget and stick to it. Its easier to track exactly how much money you are spending.

If the government reduces some of the national debt and as a result households have more money to spend, this can result in: Group of answer choices Crowding in. Fiscal crowding. External debt. Deficit spending.

Answers

If the government reduces some of the national debt and as a result households have more money to spend, this can result in crowding in.

What is crowding in?

Crowding in is when an increase in government spending increases the amount of money in the economy. This increases the money that households can spend and it also increases the level of investment spending in the economy.

If you are the manager of a hotel and a person who booked a room for the week calls to cancel the reservation, you have a duty to attempt to rent the room to someone else to minimize the damages. This is known as the duty to ______ damages.

Answers

In the situation, the duty to try to rent the room to someone else to minimize the damage is known as the duty to mitigate the damage.

What is the duty to mitigate damages?

Corresponds to the obligation that a person has to reduce his losses by taking reasonable actions to do so, even if the losses are not related to a personal action.

Therefore, the duty to mitigate damages helps in planning actions and strategies that reduce the consequences caused by losses to a business.

Find out more about duty to mitigate damages here:

https://brainly.com/question/14480857

#SPJ1

Which of the following scenarios would the National Highway Traffic Safety Administration be involved in?
investigating the use of a faulty gearbox in a semitrailer
determining the number of cars sold in the country in a year
building railways within city limits
modifying the fuel efficiency standards for new cars
setting the emission standards of an automotive factory

Answers

The National Highway Traffic Safety Administration be involved in determining the number of cars sold in the country in a year.

What is Traffic?

In Simple terms, Traffic can be defined as the flow if Vehicle(Especaily) to and fro a particular axis or road. When there is a large amount of vehicle moving through a small passage, we say traffic is high.

Too much vehicle plying on a road can lead to traffic congestion.

Learn more about traffic here:

https://brainly.com/question/1071840

Answer:

See image

Explanation:

See image

______ marketing is the practice of focusing on the identification and recruitment of influential people to advocate a company's products, services, and brands rather than focusing exclusively on prospective buyers.

Answers

Influencer marketing focus on the identification and recruitment of influential people to advocate a company's products and brands rather than focusing exclusively on prospective buyers.

What is marketing?

Marketing involves all strategies and various processes a company or firm make use of to get a product to the end users.

It include how they advertise and distribute their product to sell.

Therefore, Influencer marketing is the practice of focusing on the identification and recruitment of influential people to advocate a company's products, services, and brands rather than focusing exclusively on prospective buyers.

Learn more on marketing here,

https://brainly.com/question/25369230

Lev, an agent for Mill Grains LLC, executes an unauthorized contract with National Grocers Inc. The deal is highly advantageous to Mill Grains, and the company ratifies the contract. The contract is

Answers

Given that the contrsct that is being made here has been said to be ratified, the contravt can be said to a valid contract.

What is a valid contract?

This is a term that is used to refer to a contract that has been found to b e valid and also enforceable.

What makes a contract valid is the fact that there is an expressed offer, and a valid acceptance.

Read more on contracts here: https://brainly.com/question/5746834

#SPJ1

Li Wei is searching through his company's files of its customers to choose ones that would most likely be interested in the new product line his company has developed. Which stage of the personal-selling process is this

Answers

According to the personal-selling process, the prospecting stage is the first step in the sales process and consists of searching for prospective clients.

What are the prospecting stage?

It is the first phase of the personal-selling process and its purpose is to identify potential clients.

In other words, sellers obtain candidates who need the company's product or service, for this, it is essential to carry out market research in order to identify people who have needs that the company can satisfy.

Therefore, we can conclude that according to the personal-selling process, the prospecting stage is the first step in the sales process and consists of searching for prospective clients.

Learn more about personal-selling process here: https://brainly.com/question/15103390

A discount on bonds payable occurs when a company issues bonds with an issue price less than par value. Group of answer choices false true

Answers

It is a true statement that discount on bonds payable occurs when a company issues bonds with an issue price less than par value.

What is a discount on bonds payable?

This means the difference between face value of a bond and the reduced price at which it was sold by the issuer.

Hence, this discount occurs when a company issues bonds with an issue price less than par value.

Therefore, the statement is a true statement.

Answers

The market environments made up of consumers and companies is the traditional marketplace, and the other is the marketspace.

What is the marketplace?

Corresponds to the market where exchanges, transactions and negotiations of products and services between individuals and organizations are carried out.

Therefore, through the marketplace and marketspace, economic transactions are carried out and determined by the law of supply and demand.

Find out more about marketplace here:

https://brainly.com/question/25689913

The window of opportunity to capitalize on an innovation is very narrow, so businesses with new ideas should:_______.

a. Develop customer-centric marketing that is enhanced with AI.

b. Move quickly so that competitors do not swoop in and pass them by.

c. Conserve their resources and hope they can survive disruptive innovation.

d. Partner with offshore suppliers to reduce labor costs

Answers

So the window for capitalizing on innovation is so small, that companies with innovative ideas should act quickly and Develop AI-assisted customer-centric marketing strategies.

Thus Option A is correct.

What is the definition of customer-centric marketing?

Customer-centric marketing is a marketing approach that is focused on the needs and wants of customers. It's all about putting customers first, using a mix of insight, good judgement, and statistics about their behavior.

Being customer-centric entails more than simply recognizing the customer's significance.

It all comes down to getting to know your consumers so you can anticipate their needs, expectations, and communication choices, create better experiences, and build long-term connections. It's also easier to say than to do.

For more information about customer-centric marketing refer to the link:

https://brainly.com/question/1513160

#SPJ1

The materials price variance is calculated using the ______ quantity of the input purchased.

Answers

Answer:

the answer is: calculator

When an organization has a central core of key functions and outsources others to vendors who can do them cheaper and faster, the organization is said to have a ______ structure.

Answers

When an organization has a central core of key functions and outsources others to vendors, it is said to have a hollow structure.

What is Hollow structure?

This is an organizational structure in which the non core processes are outsourced while the core processes are done internally.

This structure are normally outsourced to vendors who can do them cheaper and faster.

Read more about Hollow structure here https://brainly.com/question/6820002

Assume you invested $5,000 in a mutual fund that earns 6% compounded annually on December 1, 2018. The balance in your account on December 1, 2023 will be $

Answers

The balance in your account on December 1, 2023 of the mutual fund account will be $6691.

How to calculate the mutual fund?

From the information given, the person invested $5,000 in a mutual fund that earns 6% compounded annually on December 1, 2018.

The amount in the account by the date will be:

= 5000 × ( 1 + 6%)^5

= 6691

In conclusion, the correct option is $6691.

Learn more about mutual fund on:

https://brainly.com/question/4084772

#SPJ1

Donna is well-respected for her decision-making skills, always supporting her proposals with detailed pro and con insights she gathers from sources with a balance of perspectives. Donna's strategy to _______ facilitates acceptance of her decisions by top management.

Answers

Answer:

Rely on objective information

Explanation:

Perit Industries has $165,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are:

Answers

The net present value of project A that Perit Industies plans to undertake is $-79,009.91.

What is the net present value?

Net present value is the present value of after-tax cash flows from an investment less the amount invested.

NPV can be calculated using a financial calculator

Cash flow in year 0 = -165,000Cash flow in year 1 - 6 = 21,00Cash flow in year 6 = 9500

I = 14%

NPV = $-79,009.91.

Please find attached the complete question. To learn more about net present value, please check: https://brainly.com/question/25748668

If the nominal interest rate is 18 percent and the real interest rate is 8 percent, the inflation rate is

Answers

Based on the nominal interest rate and the real interest rate, the inflation rate must be 10%.

What is the inflation rate?

The inflation rate is the difference between the nominal rate and the real interest rate.

It can be found as:

= Nominal rate - Real interest rate

Solving gives:

= 18% - 8%

= 10%

In conclusion, the inflation rate is 10%.

Find out more on inflation rates at https://brainly.com/question/25877453.

Other Questions

for questions 1-8, identify the line of reflection by writing x-axis or y-axis please help ill mark you brainlist istg 1. What happens to the protagonist in "AWOL: All Wrong Old Laddiebuck" when he goes on a joyride? A. He almost falls off a cliff, then he and Miss AWOL are pursued by the police. B. He gets mad at Miss AWOL and goes back to the Army. C. He leaves the Army and goes back to the United States. D. He and Miss AWOL fall in love and get married. introduction only: cris-moi ici les diffrences du systme scolaire (school system) entre les tats-Unis (US), la France et le Qubec. write equivalent fractions for 3\5 and 1\4 using 20 as the conman denominator If f(x)= x^3 + 6x^2 - 9x + 14 and x-2 is a factor of f(x), then find all of the zeros of f(x) algebraically. Why did many farmers, artisans, and former Anti-Federalists support the Democratic-Republican Party?A The Democratic-Republicansgovernment.B TheDemocratic-Republicanssupported strict restrictions on immigration.Csupported the use of tariffs.The Democratic-RepublicansThe Democratic-RepublicansDfavored states' rights and the rights of the commman. A. la palanca de cambioB. el maleteroC. el volanteD. el asiento write three addition problems that have a sum of -2 In this lab, you will need to be able to describe how multiple waves interact with each other. 1) This does not add too much mathematical complexity to the wave equation (Eq. 2), and 2) it allows us to develop a closer approximation of real-life situations as well (e. G. Interacting ripple patterns in a pond, music, atomic physics, etc. ). Here, you will explore the superposition of two waves, y1 and y2, where: A cylinder with height,h, and radius,r, has a volume of 1200pi cubic units. What could be the dimensions of this cylinder? It is common knowledge that a fair coin lands heads up 50% of the time and tails up 50% of the time. For fair coins, a probability of 0 is assigned to the coin landing on its edge. But what if several coins were glued together? A teacher claims that if 10 pennies were glued together and flipped many times, the penny stack would land on heads 25% of the time, tails 25% of the time, and on its edge 50% of the time. To investigate this claim, a student glues 10 pennies together and flips the stack 200 times. The student would like to know if there is convincing evidence that the distribution differs from what the teacher claimed. What are the appropriate hypotheses?H0: The distribution of flips is 25% heads, 25% tails, and 50% edge.Ha: The distribution of flips is not 25% heads, 25% tails, and 50% edge.H0: The distribution of flips is not 25% heads, 25% tails, and 50% edge.Ha: The distribution of flips is 25% heads, 25% tails, and 50% edge.H0: The penny stack will land on heads 50 times, tails 50 times, and on its edge 100 times when flipped 200 times.Ha: The penny stack will not land on heads 50 times, tails 50 times, and on its edge 100 times when flipped 200 times.H0: The penny stack will not land on heads 50 times, tails 50 times, and on its edge 100 times when flipped 200 times.Ha: The penny stack will land on heads 50 times, tails 50 times, and on its edge 100 times when flipped 200 tim Walt collected random samples of data on the number of people who eat at whorestaurants daily. He created two dot plots to represent his data. Find the degree ofoverlap and the mean of the two data sets. Write a paragraph, using the RACEformat, explaining how you got the answer. Use what youve read in the passage to answer this question.In this article about extreme travel destinations, the writer chose to include these three places because they share certain general qualities. Write a list of qualities shared by these places. Use evidence from the text and your own ideas to support your list. What is 1050 rounded to the nearest thousand? what are the 5 different business functions in the food industry? Will the positioning of your Slinky along the east-west, north-south, or some other orientation affect your readings? Why? Instructions: Find the measure of the indicated angle. The key droid explains, WHOEVERPASSES THROUGH THAT GOLDENDOOR INHERITS THE HOUSE. Which isthe definition of inherit? A student wrote the following equations:3y + 6 = 2x2y - 3x = 6The lines represented by these equations are(1) parallel(2) the same line(3) perpendicular(4) intersecting, but not perpendicular help quick pls. Ms. Boi spent a total of $175.00 for 4 admission tickets and for parking at a baseball game. The cost of each admission ticket was the same amount, including tax. The cost of parking was $25. Write an equation that can be used to determine t, the cost, of each admission ticket, including tax.