In fact, additional financing that would not be necessary in an independent startup is often required. If you don't get the disclosure or are uncomfortable with what it says, we recommend you delay signing any contracts until you are satisfied. The costs of franchising include a variety of fees and contributions typically required by the franchisor in exchange for the assistance and experience of the franchisor. Usually an initial franchise fee or license fee will be required. The fee may be a lump sum or may be payable in installments.
Interest varies and is often nonrefundable.
These fees are typically tied to a percentage of sales and payable weekly or monthly. If bookkeeping is centralized, separate accounting and processing fees may be assessed. Additional payments for equipment, supplies, property, and beginning inventory may be required. In addition to the monetary expenses associated with purchasing a franchise, remember that one of the unavoidable costs of franchising is the sacrifice you make in control and ownership of the business. For more information on franchising, see our discussion of starting a new business under a franchise agreement .