Franchise Fee

The franchise fee is the initial payment a new franchisee pays to the franchisor to gain the rights to operate under the brand’s name, access training, systems, and initial support. It is typically a fixed amount and does not cover other startup costs like equipment, leasehold improvements, or inventory. The franchise fee is part of the overall investment required and is disclosed in Item 5 of the Franchise Disclosure Document (FDD). While fees vary depending on the brand and industry, they generally range from $10,000 to $75,000. It’s important to differentiate this fee from ongoing royalty or marketing fees that may also be required.