Why in the world would I pay a franchise fee? This is a question I often get as a certified franchise consultant (CFC).

A franchise fee is a one-time fee charged to a new franchisee when purchasing a franchise. A franchise fee can range from a few thousand dollars to $50,000 or more and is usually paid at the time of signing a franchise agreement. In most cases, the franchise fee is non-negotiable, at least in the case of a single-unit franchise.

As a CFC, I am trained to educate investors when exploring franchise opportunities on what the franchise fee covers and why it’s important. The most common benefits that are offered in return for a franchise fee are inclusion in the system and rights to use a franchisor’s brand, trademarks, and marketing materials.

Franchise fees also typically include comprehensive training and ongoing mentoring to run the business, access to proprietary systems and business processes, rights to national accounts or to use negotiated vendor products and services, software, and operations manuals, and may also include location selection and build-out assistance.

While these are the more common things included with a franchise fee, sometimes franchisors will include other items and services such as a grand opening campaign, computers, software, and supplies for the trade.

For assistance with your franchise search, contact me for more information on how I can help you along the way.

Originally written by Don Clayton (FDM November 2022) – revised by Cindy Charette