Franchise Costs: What You Pay and How People Pay for It

How much does a franchise cost?

A franchise can cost from a few thousand dollars to several hundred thousand, and the number that matters is the total initial investment in FDD Item 7, not the franchise fee. The fee is one line in that total. Equipment, a vehicle or lease, inventory, insurance and a cash cushion make up the rest.

The business model drives the price. In their 2026 Entrepreneur listings, Cruise Planners, a home-based travel agency, lists $1,945 to $20,505; Soccer Shots, a kids sports program, lists $42,950 to $54,300; Right at Home, an in-home senior care brand, lists $94,330 to $176,239; and PuroClean, a restoration brand, starts at $241,503. These are examples, not a short list. Budget for the high end until the franchisor shows why the low end fits your market.

The franchise fee and ongoing fees (FDD Items 5 and 6)

You pay the franchisor before you open (Item 5) and then on a schedule for as long as you operate (Item 6). Both items are required by the FTC Franchise Rule at 16 CFR 436.5.

• Initial fees (Item 5). All payments to the franchisor or an affiliate before opening, plus when, if ever, they are refundable. A low fee can sit inside a large total: Chick-fil-A says its initial franchise fee is $10,000 and that the total initial investment goes beyond that payment.
• Royalties. The FTC’s buyer guide says you may pay royalties based on a percentage of your weekly or monthly gross income, so they are due in slow months too.
• Advertising or brand fund. The FTC guide notes you may also have to contribute to an advertising fund. Item 11 explains how the fund is run and spent.
• Technology. Item 11 must disclose required computer or point-of-sale systems, their cost and the annual cost of maintenance, updates or support.
• Other fees. The rule’s Item 6 examples include additional training, audits, accounting, advertising cooperatives, transfers and renewals.

Rates vary by brand, so turn the Item 6 table into a monthly cost before you look at any sales figure.

Total initial investment (FDD Item 7)

Item 7 is the franchisor’s low to high estimate of everything it takes to open. Under 16 CFR 436.5(g) it lists the franchise fee, training, real estate, equipment and build-out, opening inventory, deposits and licenses, and other required payments.

The line buyers skip is “Additional funds,” which covers expenses during an initial period of operations, which the rule says is reasonably at least three months or a reasonable period for the industry. Check whether it allows anything for your own pay; the FTC guide asks whether you have savings or other income to live on until you open.

Item 7 also moves: under 16 CFR 436.7, the franchisor must update its disclosure document within 120 days after its fiscal year ends.

Liquid capital and net worth requirements

Liquid capital and net worth minimums are qualification tests, not costs, and they can sit above the Item 7 low end. They are not a required FDD item; check the franchisor’s website or application.

Right at Home says on its franchising FAQ that you must have access to $150,000 in liquid capital to be considered, while its range starts at $94,330 per its 2026 Entrepreneur listing. Sandler lists an initial investment of $77,500 to $102,250 with a $250,000 net worth requirement and a $75,000 cash requirement in its 2026 Entrepreneur listing.

Franchise cost types and where to find them in the FDD

Every cost a franchisor controls has a home in the FDD. Use this map to open the right Item.

Source: Federal Trade Commission Franchise Rule, 16 CFR 436.5 (disclosure items), accessed October 2, 2026.

How people pay for a franchise

Most routes mix your own cash with one other source, and every borrowed dollar puts something you own on the line.

• Cash and savings. Under SBA SOP 50 10 8.1, unborrowed cash, including a documented gift, counts toward the equity a lender requires.
• SBA 7(a) loan. The SBA says the maximum 7(a) loan is $5 million. SOP 50 10 8.1, effective October 1, 2026 according to SBA Information Notice 5000-880695, requires a 10 percent equity injection based on total project cost for 7(a) loans to a start-up. The brand must be on the SBA Franchise Directory, which the SBA says is not an endorsement.
• ROBS (Rollovers as Business Start-Ups). Using retirement funds to pay start-up costs. The IRS says these plans are not considered abusive tax avoidance transactions but are questionable, and its compliance project found that most ROBS businesses either failed or were on the road to failure. Get independent tax advice first.
• HELOC. The CFPB describes a home equity line of credit as a line you can borrow against repeatedly, and warns that if you fall behind you could lose your home.
• Partners or investors. Under SOP 50 10 8.1, an investor’s money counts toward the equity injection only if it does not have to be repaid before the SBA guaranty is released.
• Franchisor financing. Item 10 must disclose the terms of any financing the franchisor or its affiliates offer.

Go deeper: guides in this section

Start with your real budget, then compare brands inside it. Our guide to franchises under $100k separates total budget from cash on hand and walks through the SBA math at that level. If you are earlier in the process, buying a franchise covers the steps from first research to signing.

A consultant can help compare costs across brands; what a franchise consultant does explains where they help and where they do not. The FTC warns that brokers paid on commission may steer buyers toward more costly franchises, so read how franchise consultants get paid. When you know your numbers, the free franchise match quiz introduces you to a consultant; this site may be paid for that introduction, as our disclosures explain.