Are Franchisee Fees Worth It? Here's What You Need to Know

Author: Miguel Alvarado

Date: AUG 26th, 2015

Topic: Industry Experts

If you’ve ever looked at a franchisee fee and raised your eyebrows, you’re not alone. Starting fees may range into several thousand dollars, and when you're making such a big decision, it's only natural to want to confirm you're getting the better end of the deal.
 
An initial fee can seem expensive without any context behind it, so if you want to determine whether the figure is too high, you’ll have to first check all aspects of the franchisee thoroughly. The best way to review a franchisee fee is by comparison, particularly to the cost you’d have if you were starting the business on your own, outside of the franchise.
 
The Price Tag of Knowledge
 
While you can make an educated guess after opening a few units, you may not really know the right kind of location for your business at first, before you’ve made a costly mistake. Same idea holds true for employees. Sure, after you’ve hired, tried to train, and fired some, you’ll have an idea of what kind of employee you need, but before that you'll waste time and money.
 
Marketing is another expensive angle. You'll need to invest in marketing campaigns to attract customers to your business. But it can be expensive when you're on your own, and you'll also have to figure out what works for your business and what doesn't.
 
With a franchise, the guesswork on marketing, locations and employees is removed. The franchisor has systems in place for training, marketing and location selection, allowing you to make the right decisions from the get-go. And even if you're struggling, a good franchisor will have support and guidance available to help you.
 
Before you buy a franchise, you can ask to see where your franchise fee goes. Franchisee fees may go toward improving training and support procedures and systems as well as developing products and services and its marketing. While the fee may seem high to you, it's going toward helping you run and maintain your business, which is truly priceless.