How much does a typical franchise business cost in the USA ? 
Is there a site that breaks down what a person gets for his/her money
? eg software use, use of brand name, good will, help with setting up
the business  etc)

Hello dogsbollocks,

Depending on the type of business, the franchise fee can cost anywhere
between $5,000 and $30,000.
 
Franchise fees-
?The franchise fee is the amount you pay the franchisor to offset the
franchisor's cost of locating, screening, negotiating with, and
training you. It may also cover the costs involved in site selection
and development, promotions, grand opening events, and ongoing support
during your first months of operation.
Franchise fees vary, depending on the franchisor. They can range from
$0 (which is very unusual) to more than $100,000.?
 
Dummies.com: Examining Franchise Costs 
http://www.dummies.com/WileyCDA/DummiesArticle/id-539.html


?According to the International Franchise Association (IFA), almost
75% of new franchise owners can get into business for a total
investment, including fees and operational expenses, of less than
$250,000. The typical investment is usually in the $100,000 to
$200,000 neighborhood, although totals vary. Some franchises require
less than $10,000 to start, including the franchise fee and other
operational expenses.?
(?)
?Some franchises require less than $10,000 to start, including the
franchise fee and other operational expenses.?
(?)
?Prices vary, but most franchise fees cost $15,000 to $30,000. Fees
are typically non-refundable, so be sure this is what you want before
you put your money down. The fee for opening a single Papa John's
Pizza restaurant is $20,000. Expect to pay $27,500 to get into Fast
Bucks, a franchised check cashing service. Some fees may surprise you.
Snap-On Tools is a very well known brand, yet the franchise fee is a
low $5,000. The fee is only part of the package. Nutrition giant GNC
franchises start at about $30,000. The company tells would-be
franchise owners to expect to spend $132,681 to $182,031 to go into
business.?

Franchise Prospector
http://www.franchiseprospector.com/franchise-article-3.php


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The following is a general breakdown of how much a common franchise
costs and what the general the expenses are.

-------------------------
Where does the money go?
-------------------------

Franchise fee: $15,000 to $30,000 
Building rent or lease: $1,200 to $6,000 for the first three months
Building improvements and other construction costs: up to $20,000
Equipment: $5,000 - $30,000
Furnishings and Fixtures: up to $40,000
Signage: $2,000 to $7,000

-Other Startup Expenses-

Opening Inventory: $20,000 to $40,000 
Advertising: $2,100-$9,000; (total for three months) 
Insurance: $300 to $500 
Training and travel expenses: $3,500-$6,500 
Opening Promotional Materials $5,000 - $10,000 

Franchise Prospector
http://www.franchiseprospector.com/franchise-article-3.php


-----------------------------
Franchise Costs By Category 
-----------------------------

How Much Franchises Cost: 
  
The amounts shown below are in US$ and are averages of figures
provided by franchise companies that participated in a survey.
 
 
Franchise Category                         Franchise Fee       Total Investment
                         
Accounting/Credit/Collections                $17,286               $31,329 
Advertising & Promotion                      $17,813               $32,107 
Automotive Products & Services               $21,848              $207,746 
Building Maintenance/Cleaning/Inspection     $18,967               $61,262 
Building & Remodeling                        $23,509              $104,373 
Check Cashing/Protection                     $21,650              $115,920 
Child Development/Education/Products         $21,646              $133,013 
Clothing/Shoes/Accessories                   $16,667               $93,443 
Computer Sales & Service                     $17,833              $109,913 
Convenience Stores/Supermarkets/Drugs        $23,481              $380,726 
Education/Personal Development-Adult         $27,948              $123,567 
Employment & Personnel                       $21,037              $105,238 
Food-Donuts/Cookies/Bagels                   $24,676              $261,165 
Food-Quick Service/Take-out                  $20,084              $299,618 
Food-Ice Cream/Yogurt                        $18,316              $190,177 
Food-Restaurant/Family Style                 $32,925              $772,927 
Food-Specialty                               $22,714              $213,318 
Health/Fitness/Beauty                        $11,389               $91,240 
Home Improvement & Hardware                  $14,333              $118,900 
Laundry/Dry Cleaning                         $20,205              $171,121 
Lodging                                      $27,300            $6,600,000 
Packaging/Mailing                            $22,054              $148,600 
Pet Products/Services                        $15,800              $103,820 
Photography Products/Services                $31,317              $121,067 
Security/Safety Systems                      $18,381               $99,913 
Signs                                        $20,288               $85,269 
Sports/Recreation & Entertainment            $14,983              $295,310 
Travel                                       $19,945               $76,036 
Video/Audio/Electronics                      $24,883              $135,744 

Source- Franchise.com
http://www.franchise.com/fdc/template/buyer%2CResearchCenter.vm/a/z/display/95


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At this site, to learn the costs of different franchises, you enter
the criteria desired and the results will display the current
available franchises. For instance, I selected:

Location: 
1) Desired Region: North America 
2) Desired Country: United States  
3) Desired Location: Louisiana

Select Your Available Capital: $5,000-$10,000

Select Your Work Experience: Education

The result is 33 available franchises which match location and
financial resources. Clicking on each will give you details, including
the franchise fee.

Franchise.com: Buy Franchises
http://www.franchise.com/fdc/template/buyer%2CBuyFranchises.vm


Alternatively, you can view franchises (including fees) by category:

Franchise.com: Categories
http://www.franchise.com/fdc/template/buyer%2CCategories.vm/a/z


The following site lists different franchises by category and the
minimum investment required for buying the respective franchise.
Franchise Prospector: Categories
http://www.franchiseprospector.com/categories.php


****************************************************


The following categories of information must be provided by the
franchisor to the prospective franchisee at least 10 business days
prior to the execution of the franchise agreement. These categories
include:

*The Franchisor, Its Predecessors and Affiliates 
*Business Experience 
*Litigation 
*Bankruptcy 
*Initial Franchise Fee 
*Other Fees 
*Initial Investment 
*Restrictions on Sources of Products 
*Franchisee's Obligations 
*Financing 
*Franchisor's Obligations 
*Territory 
*Trademarks 
*Patents, Copyrights, and Proprietary Information 
*Obligation to Participate in the Actual Operation of the Franchised Business 
*Restrictions on What the Franchisee May Sell 
*Renewal, Termination, Transfer, and Dispute Resolution 
*Public Figures 
*Earnings Claims 
*List of Franchise Outlets 
*Financial Statements 
*Contracts 
*Receipt 

Franchise.com
http://www.franchise.com/fdc/template/buyer%2CResearchCenter.vm/a/z/display/71


?...By paying a franchise fee, which may cost several thousand
dollars, you are given a format or system developed by the company
(?franchisor?), the right to use the franchisor's name for a limited
time, and assistance. For example, the franchisor may help you find a
location for your outlet; provide initial training and an operating
manual; and advise you on management, marketing, or personnel. Some
franchisors offer ongoing support such as monthly newsletters, a toll
free 800-telephone number for technical assistance, and periodic
workshops or seminars.?

Franchise Gator: Benefits
http://www.franchisegator.com/faq.html#benefits


------------------------------
FRANCHISE OR LICENSE AGREEMENT
------------------------------

??The rights granted to the franchisee. The franchisee will be given
the right as it applies to particular circumstances. As a franchisee
there are certain rights that are extended to you. Your rights
include:

*use of trademarks, trade names and patents of the franchisor.
*use of the brand image and the design and decor of the premises
developed by the franchisor.
*use of the franchisor's secret methods.
*use of the franchisor's copyright materials.
*use of recipes, formulae, specifications and processes and methods of
manufacture developed by the franchisor.
*conducting the franchised business upon or from the agreed premises
strictly in accordance with the franchisor's methods and subject to
the franchisor's directions.
*guidelines established by the franchisor regarding exclusive territorial rights.
*rights to obtain suppliers from nominated suppliers at special prices.?


------------------------------------------------
DETERMINING WHAT THE FRANCHISE PACKAGE CONTAINS 
------------------------------------------------

?After gathering all the information you will need to make an informed
purchase decision, carefully examine this information with your
attorney, accountant or business advisor ensuring that it is addressed
in the franchise contract??
(?)
?Your franchise package should contain the following information:

*The full initial costs and what they cover.
*Licensing fees.
*Land purchase or lease.
*Building construction or renovation.
*Equipment.
*Training.
*Starting inventory.
*Promotional fees.
*Use of operations manuals.
*Continuing costs related to the franchisor.
*Royalties.
*Ongoing training.
*Cooperative advertising fees.
*Insurance.
*Interest on financing.
*Requirements regarding purchasing supplies from the franchisor, and
if the prices are competitive with other suppliers.
*Restrictions as they apply to competition with other franchisees.
*Terms covering renewal rights and resale of the franchise.?

Source: Small Business Administration
http://216.239.59.104/search?q=cache:nc6obgzSN5kJ:www.sba.gov/opc/pubs/fran.pdf+franchisor%27s+expertise,+brand+name,+experience&hl=en&ie=UTF-8


****************************************************


Some other interesting sites:

Franchise Handbook
http://www.franchisehandbook.com/ 

International Franchise Association
http://www.franchise.org./default-flash.asp 

The Franchise Doctor
http://www.franchisedoc.com/

Franchise Opportunities
http://www.franchiseopportunities.com/

The Franchise Store
http://www.thefranchisestore.com/future_of_franchising.htm

Franchises For Sale By Owner
http://www.franchisesforsalebyowner.com/

BeTheBoss.com.
http://www.betheboss.com/


Search criteria:
franchise cost buying
franchise cost buying benefits
franchise cost FAQ
franchise franchisee rights OR benefits
franchisee cost 


I hope the information provided is helpful. If anything is unclear or
you have any questions regarding my answer, please don't hesitate to
ask. I will do my best to further assist you.

Best regards,
rainbow-ga

---

Request for Answer Clarification by dogsbollocks-ga on 28 Nov 2003 07:58 PST

Rainbow, many thanks for a comprehensive answer.

One point which wasn't covered was the % of profit/ turnover which the
franchisor levies from the franchisee (I guess this is a sort of
fee)...is there any information about this facet ?

Thanks !

---

Clarification of Answer by rainbow-ga on 28 Nov 2003 09:29 PST

Hi dogsbollocks,

The percentage of continuing fees imposed on the franchisee is decided
upon the individual franchisor and is stated in the contract between
franchisor and franchisee.


Assignment /Fees
?The monthly fees paid to the franchise company in order to support
corporate marketing and advertising. This fee is typically a
percentage of your gross revenues.?

Franchise Opportunities
http://www.franchiseopportunities.com/glossary.asp


?Every franchise contract is different for the various types of
business. In general, the more services provided by the franchisor,
the higher the fees. There is the original franchise purchase price,
and the fees charged for ongoing services...?
(...)
?Franchisors are required to give you:
*A copy of their Uniform Franchise Offering Circular (UFOC) at least
ten days before you sign the agreement. This is a standardized
promotional piece that discloses estimates of startup costs. However,
under federal law, the franchisor cannot make claims about how much
money you will make.
*Copy of the franchise agreement, other contracts, and the
franchisor's financial statements.
*The business operational manual with one week of training in one of
the parent stores, and ongoing support and assistance.
*Guidelines on audits and rights to sell the franchise (assignment rights) 
*Information on franchisee's initial licensing fees and other ongoing
costs (e.g. royalties, promotional fees, cooperative advertising
fees).?

The Franchise or License Agreement of the contract covers: 

a. The rights granted to the franchisee. This will confirm all the
details you have been told and should be specified in the detail
expected by you.
b. The obligations undertaken by the franchisor both before and after
startup. This is related to the UFOC and it is generally attached.
c. Obligations of the franchisee 
d. Trade restrictions imposed on the franchisee by the franchisor 
e. Agreements regarding assignment of ownership to others or
termination of contract.

Source: BYU Idaho: Franchising Know-How
http://www.byui.edu/Ricks/employee/NYGRENM/Web%20Page%20Documents/B283%20ENTREPRENEURSHIP%20&%20SMALL%20BUSINESS/Franchising%20Know%20How.htm


STANDARD 6.2 CONTINUING FEES. 
?Continuing fees (royalties, service fees, etc.) should fairly reflect
the value of services and rights provided by the franchisor to the
franchisee.
Commentary: Proposed by subcommittee (not adopted): Service (Royalty)
fees are compensation to a franchisor for a franchisor's efforts in
creating, maintaining and improving the franchise system. A franchisee
should pay service fees promptly when due. A franchisor should design
a service fee structure that makes it easy for a franchisee to pay
service fees during the start-up phase of a franchisee's business.?

American Association of Franchisees & Dealers: Standards
http://www.aafd.org/standards/


Cost Of A Franchise 
?When buying a franchise there will often be an initial franchise fee
which may be substantial. That is the key to access into the franchise
business including the system and the trade marks. There will also be
ongoing fees such as royalties on turnover and advertising levies.
There are some franchise systems which make their money from
collecting up-front fees, and rely far less on royalties??

Find Law
http://www.findlaw.com/12international/countries/nz/articles/558.html


I hope this is helpful. If there is anything else you need, please
don?t hesitate to ask.

Best regards,
rainbow-ga

---

Request for Answer Clarification by dogsbollocks-ga on 28 Nov 2003 10:12 PST

Thank you rainbow,
Can you find a specific example(s)of a % ? I am currently negotiating
such a deal and need to know this..
Thanks

---

Clarification of Answer by rainbow-ga on 28 Nov 2003 11:54 PST

Hi dogsbollocks

Here are a few examples:

M&M Meat Shops 

"Royalties are 3% of gross sales and are paid to Head Office on a monthly basis. 

The marketing fund is also paid on a monthly basis at the rate of 1.5%
of gross sales. This fund covers brand-based advertising and
promotions. It is governed by the Marketing Council, which is made up
of elected franchisees and Head Office representatives."

M&M Meat Shops: Franchise Info
http://www.mmmeatshops.com/en/franchiseinfo/index.asp


=================================


Real Estate Financial Services

"Credit creation, restoration, and referral service. The  franchise
fee is $20,000. Royalties start at $50 per credit  repair contract and
$25 per credit creation contract; the  national advertising and
promotion fund contribution is $350  per month. The fee includes an
eight-week training program,  exclusive territory, and ongoing
support. The company  advertises and generates high quality leads for
the franchisees."

"Building inspection service. The franchise fee is $6,875 with 
start-up costs amounting to an additional $1,600 to $4,000.  Royalties
are 10% of gross monthly income. The fee covers  marketing materials,
camera ready artwork for all kinds of ads,  an operations and
procedures manual, territorial protection,  office supplies and forms,
and ongoing support."

Sierra NV: Real estate
http://www.sierranv.net/~online/html/body_real_estate.html


=================================


Bevinco 

"Q: What do you get for the Bevinco Franchise fee?
A: Our proprietary software program that makes the whole thing work.
Two weeks of "hands-on" training as well as ongoing toll-free support
from a Master Franchisee n your area. But, the most important aspect
is you get a protected territory that contains 250 licensed
establishments. No other Bevinco auditors can come in to your area to
compete with you- The franchise fee for a protected territory with
BEVINCO is $34,900, with a total investment of under $40,000, which
includes the equipment costs. Royalties, a standard in the franchise
,industry, are $12 per audit."

Bevinco
http://www.bevinco.com/hbc.htm

 
=================================


Quizno's Sandwich Shop

"...In April of this year, he bought out another Quizno's franchisee
at 591 College Drive.

Tagliavia is not allowed to disclose revenue figures. He pays 7
percent monthly royalties to the Denver-based corporation based on
revenue after sales tax, discounts and other exemptions, plus another
4 percent for corporate advertising.

The International Franchise Association reports typical franchising
revenue for its members is $3.94 million and franchising revenue per
employee is $257,000. Operating profits before taxes range from 9.8
percent on average for retail franchises to 20.5 percent for business
services."

ReviewJournal
http://www.reviewjournal.com/lvrj_home/2003/Jul-20-Sun-2003/business/21715245.html 


=================================
 

A Juice & Smoothie bar
 
"Cost - A typical franchise has a franchise fee of $10,000 - $25,000
per store and a monthly royalty of 5-8%."
J&SBC
http://www.juiceconsult.com/why_us/consulting_vs_franchising.html


More examplescan be found at the following sites:

Melaniphy & Associates, Inc.
http://www.melaniphy.com/ARTIC10.HTM

Bison
http://www.bison1.com/articles/expert1-03.html

Chicken Delight
http://www.chickendelight.com/franchise.html


I hope this is the information you are seeking. Please let me know if
I can be of further assistance.

Best regards,
rainbow-ga

Hi dogsbollocks,

Thank you for the rating and tip!

Best regards,
rainbow-ga