franchising

How much does it cost to buy a franchise? Virtually all of the estimated 2,500 franchises operating today have different fees and expenses, so there's no easy answer. Initial fees can range from a few thousand dollars to millions, according to the second of a series of International Franchise Association Educational Foundation studies, The Profile of Franchising 2006, conducted by the research firm FRANdata.  

"This new data confirms that franchises, with their wide range of investment price-points, create a marketplace that offers abundant opportunities for prospective small business owners at all investment levels," said IFA Chairman Lawrence "Doc" Cohen, a longtime franchisee who owns and operates nearly two dozen franchised establishments under two different brands.

"As the study shows, an investor can acquire a franchise for a relatively reasonable amount of money," IFA President Matthew Shay said. "Not only are there low entry barriers to ownership, but with 75 industries now using franchising as a growth model, the choices are plentiful."

Understanding the initial investment requirements of franchises, which pay for basic training and processing expenses, must take into account that there are also many different types of businesses that use the franchise model, and among them there are many different types of operating programs available. HBM

IFA (www.franchise.org) is a 46-year-old trade group encompassing a broad membership of more than 1,000 franchise companies, thousands of franchise small-business owners, and hundreds of firms that supply goods and services to the sector. FRANdata (www.frandata.com), an Arlington, Va.-based research firm, is the leading source of information and analysis about franchising.