Franchising is a great way to grow an existing business, but you need to first understand what it will cost before moving forward. Keep in mind every business will face different costs, which is why there is so much to consider when making your initial decision.
In order to make the best decision for you and get a handle on the cost of franchising, you need to first consider why it is you want to franchise your existing business. Do you currently have a profitable business you believe would make a good franchise? Are you unable to expand in any other way, because of your current cash flow or inability to get a loan? Do you have staffing needs and unless those staffing needs are met you will be unable to expand beyond your current business? All of these are valid reasons to franchise!
Now that you are clear on the why of franchising, it is time to look at specific numbers. For most businesses, the cost of franchising is comparable to the cost of starting the initial business. It can range from as low as $50,000 to as much as $250,000 or more, depending on the type of business. Evaluate your initial business investment and then consider how much it would cost to open another identical business to what you have now. The initial cost of franchising can feel overwhelming, but you are creating a mold that can be used again and again. It is much different than investing this money for just a single business.
There are several variables that can contribute to the final cost of franchising your business, such as whether you plan to expand locally, nationally, or internationally. Try to err on the higher side when making your estimates so you are not caught off guard by higher numbers than expected. This kind of careful planning can help you make the best decisions for your new franchise.