How franchising works
You pay for a brand, a system and support, and in return follow the franchisor's standards.
Start with how to become a franchise owner. If you own a business and wonder whether to franchise it yourself, read how to franchise a business.
Weigh the pros, cons and fees
Fees continue after the purchase, so the full cost is higher than the upfront fee.
See pros and cons of buying a franchise and average franchise fees. Ask every franchisor for its disclosure document and have an attorney review it.
Choosing among franchises or buying an existing one
Compare brands by unit economics and support, not by popularity alone.
The list in best and worst franchises to buy helps frame the comparison. Buying a location already operating is covered in buying an existing franchise.
Questions to ask before you sign
Franchise decisions are expensive to reverse, so ask hard questions first.
- What is the total investment, including working capital?
- What are the ongoing royalties and marketing fees?
- How do existing owners perform, and can I speak with several?
- What territory protection and exit terms apply?
Have an attorney read the franchise disclosure document before you commit any money.
Paying for the franchise
Franchise financing often combines owner cash, SBA loans and equipment financing.
Read how to get a loan for your franchise. ROI Funder does not place acquisition loans, but equipment financing and SBA loans may fit parts of a franchise budget.
Use the guides to decide whether you need money at all, and how much. When the answer is yes, a clear picture of what the funds will produce makes the decision easier and the conversation with a funder shorter. ROI Funder covers all 50 states, places funding from $5,000 to $5,000,000 and can fund approved, complete files the same business day. See how it works for the steps.
Guides in this collection
- 6 Types of Business Plans and How to Choose the Right One
- Business Loans for LLCs: What Lenders Need From You
- Business Startup Costs: What to Budget Before You Open
- Business Tax ID Number (EIN): What It Is and How to Get One
- Buying an Existing Franchise: What to Check and How to Fund It
- Can a new LLC get a business loan?
- Covenants in Business Loans: What You Are Agreeing To
- EIN-only business loans: what you can and cannot skip
- Facebook Ads for Small Businesses: How to Start and Not Waste Money
- Franchise Fees Explained: What You Pay Before and After You Open
- Google Ads for Small Business: How to Start Without Wasting Budget
- How to Become a Franchise Owner, Step by Step
- How to Franchise Your Business
- How to Get a Loan for Your Franchise
- How to Present a Business Plan So People Say Yes
- How to Start a Business: Steps in the Right Order
- How to Start an Email Newsletter for Your Small Business
- How to Tell the Best Franchises From the Worst Before You Buy
- How to Write Business Plan Objectives That Are Measurable
- How to Write a Business Plan That Lenders Will Actually Read
- How to Write a Business Plan That You Will Actually Use
- How to Write the Competitive Analysis Section of a Business Plan
- How to finance a franchise purchase
- How to set up an LLC for funding
- Imports and Exports for Small Business: How to Get Started
- Pros and Cons of Buying a Franchise
- ROBS Explained: Funding a Business With Your Retirement Savings
- SBA Loans for Franchises: What Franchisees Need to Know
- Small Business Email Marketing: A Plan You Can Start This Week
- Small Business Marketing for Beginners: Where to Start
Frequently asked questions
How much does a franchise cost?
Total cost includes the franchise fee, build-out, equipment, inventory and working capital. The disclosure document lists the franchisor's estimated range.
Can I finance a franchise purchase through ROI Funder?
ROI Funder does not place acquisition loans. Equipment and working capital for an operating franchise may fit once you meet the requirements.
Is a franchise safer than an independent business?
Not automatically. A franchise brings a proven system but also fees and limits, so evaluate each one on its own numbers.