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FranFinders – What is Total Investment for a Franchise?

As you are searching for a franchise, you undoubtedly have come across the term, “Total Investment.”

Here is a short definition as it relates to franchises. Total investment is the total sum of the “Estimated Initial Investments” that are stated in a franchise’s Franchise Disclosure Document (FDD), Item 7. It is usually expressed as a range. This range usually includes, but is not limited to:

Franchise Fee

Real Estate/Rent

Leasehold Improvements

Utility Deposits

Insurance

Office Equipment/Supplies

Training

Signage

Furniture/Fixtures/Equipment

Initial Inventory

Computer Software

Dues/Subscriptions

Licenses/Permits

Legal/Accounting

Payroll

Operating Funds

 

Each franchisor discloses through their FDD, a suggested range for the Estimated Initial Investment. To know exactly what your cost will be, you’ll need to conduct research to the associated costs related to your market.

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