What are the cost differences between franchises and startups?

What are the cost differences between franchises and startups?

Franchises typically have initial franchise fees, ongoing royalties, and marketing costs, while startups may have variable costs depending on the business model.

Can you give me an example of the costs involved in starting a franchise?

Sure! For example, a fast-food franchise might require an initial investment of $50,000 to $1 million, including equipment, inventory, and fees.

How do ongoing costs compare between the two?

Ongoing costs for franchises often include royalty fees (around 5-10% of revenue) and marketing contributions, while startups may have variable costs like rent and salaries.

Which option is generally more cost-effective?

It depends on the business model and market conditions. Franchises offer a proven model but can be more expensive upfront, while startups may have lower initial costs but higher risks.