Are You Ready to Franchise Your Business? Costs for First Year of Franchise Sales

Total Estimated Costs for Initial Franchise Sales: $22,500 to $75,500

The franchise sales stage comes right after the franchise development stage and, as to many aspects, should be occurring side-by-side during the later part of the franchise development process. Although marketing and selling franchises goes beyond the scope of this article, its important that when you consider the cost of franchising your business you include a franchise sales budget for the first 12 months. Knowing how much you need to invest in franchise sales will, largely, be determined by the industry you operate in, the number of organic qualified prospects (i.e., existing customers and contacts) that are already interested in buying your franchise, the internal marketing capabilities of your own team, and, most important, the number of franchises that you want to sell.

Assuming that you are in a favorable industry that is not oversaturated and assuming that you have a realistic franchise sales goal of 5 new franchise sales (i.e., not sales to your existing organic contacts), you should consider the following aggregate costs over the initial 12 months:

1. Franchise Sales Website – At the most basic level you will need to develop a franchise sales webpage and, possibly, a franchise sales website. Just adding a standard webpage with a contact form is not enough and will cost you deals. You’ll need to invest in a webpage and, eventually, a website that educates and informs prospective franchisees about your franchise, why you’re different and how you franchise can improve their lives. Estimated Cost $2,500 to $15,000.

2. Franchise Brand Positioning – As you check out franchise sales websites you may find that they all sound the same – “be in business for yourself, not by yourself” and “we provide training…” – so it’s important to spend some time now to evaluate what your offering and get down into writing and, eventually, web copy, the unique selling points of your franchise offering and why your different. You could do this yourself (many times you’ll know better than anyone else) or hire a outside team. Estimated Cost $0 to $2,500.

3. Franchise Sales Presentations – Consistent with the development of your website and franchise brand positioning, you’ll need to develop sales materials and presentations that tell the transformation story of your brand an d educate your prospective franchisees. You can do this yourself or with an outside team. Estimated Cost $0 to $3,000.

4. Public Relations and Brand Validation – As a start-up franchisor since you wont have a track record of successful franchisees, you’ll need to build up third-party validation and there’s no better way than through a franchise PR agency that gets your brand talked about and third-party stories and articles. Franchise PR budget significantly. Estimated Cost $15,000 to $25,000.

5. Paid Advertising – Paid advertising takes many forms including google pay per click ads and social media sponsored posts and ads. Estimated Cost $0 to $20,000.

6. Joining Franchise Broker Organizations and Attending Conferences – Along the way you should plan on attending an IFA franchise conference to gain more industry insights into franchising and also join a lower cost broker organization to start networking with brokers. Estimated Cost $5,000 to $10,000.