Want to purchase a franchise, What are the initial costs?

For those who are considering buying a franchise you will need to know that the initial franchise fee is not the only cost to secure that business of your own that you have always dreamed of.

The Initial Franchise Fee is generally the money paid for use of the rights and trademarks. There will also be other costs and fees to be paid to start the business, as well as ongoing fees such as royalties and other costs, which will be described in the UFOC Uniform Franchise Offering Circular.

Below is an excerpt on Item 5 from a Uniform Franchise Offering Circular, which I prepared for my company;

ITEM 5

INITIAL FRANCHISE FEE

We offer franchises on a single unit basis. The Initial Franchise Fee is $20,000 and is payable in a lump sum upon signing the Franchise Agreement and may not be uniform in all cases for persons purchasing a franchise under this offering. We may allow you to enter into a direct financing agreement with us for a portion of your Initial Franchise Fee.

Upon signing the Franchise Agreement, $10,000 of the Initial Franchise Fee will be deemed fully earned and non-refundable in consideration of administrative, marketing, legal expenses associated with preparing this and other documents required by the government to protect you and other expenses incurred by The Company in granting the franchise and for our lost or deferred opportunity to other potential Franchisees.

If you fail to satisfactorily complete your training course, the remaining $10,000 will be refunded or, if applicable, subtracted from the balance due any direct financing agreement you have with us.