Franchise costs and returns
- What are the costs? How much is the up-front fee? Good franchisors usually make most of their profits from the continuing stream of royalty payments from successful franchises. Initial fees should only reflect the costs of franchise development and administration.
- How much will you need to invest? Check that the franchisor’s figures include realistic costs. What percentage royalty is payable? What other charges (eg promotion, training) will you have to pay? Find out exactly what you get for your money.
- What financial performance can you expect?
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