Checklist for Financial Costs in a Franchise



When checking Out the financial costs in  a Franchise, ask yourself the following:

  • Is the franchise fee only a deposit and if I don’t go ahead is it fully refundable?

  • How much money would I need to pay for the upfront franchise fee and what costs are involved in the royalties?

  • What promotion and advertising costs do I have to pay when I take this on?

  • How much money would I need for the operations over the next 6 months, until the franchise starts to run profitably?

  • What wage figures have they put into the projections and does it allow for employees to be brought in or am I and my family expected to work the whole business at low rates of remuneration?

  • How much money do I need to get together to start up this business?

  • What systems and accounting practises run by the company and are they sound or can they give a wrong picture of the franchise?
  • Are there any training costs involved and who meets those?

  • Would the franchisor provide financing or would he assist me to arrange financing through other lending institutions?

  • What i...

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Checklist

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