Financial Questions to Ask Yourself Before Buying a Franchise

Buying a franchise is an important decision that will impact you financially. Each franchise business comes with financial obligations that include startup costs and ongoing expenses. A lodging franchise

requires an investment ranging from $4 million to $6 million, a full-service restaurant requires from $700,000 to $3.5 million, a fast food restaurant requires from $250,000 to $1 million, and an auto repair business requires from $200,000 to $300,000.

Because of these potentially large price tags, you need to ask yourself specific financial questions before buying a franchise.

How much initial investment will you need to buy the franchise?

Your startup costs can include a franchise fee, an initial cash investment, professional fees, insurance, employee training, operating licenses, inventory, equipment, and the expenses involved in running a retail or office space, such as moving expenses, furnishings, equipment, decor, signs, and landscaping.