Breaking Down the Investment: Franchise Expenses You Should Take into Account

Financing a franchise can be one of the most financially freeing decisions you’ll ever make, but you still need to be able to provide start-up and other fees before you become a franchisee. Here are some of the costs you need to keep in mind if you’ve decided to join Experimax’s team of highly successful franchisees:

The initial investment

Starting out with Experimax will include three payments that are set out as follows:

  1. We will require you to pay a Franchise Fee upfront, which will be due when you sign the franchise agreement to officially become an Experimax franchisee. This amount is between $185 000 and $195 000, and covers, amongst other things, the franchising training you’ll receive, and other expenses involved in becoming a franchisee.
  2. After your training, you will be required to provide a working capital investment of $45 000, which will be used to provide you with cash, banking accounts, and assets that can be easily converted. This investment will also cover your inventory costs, salaries and other related costs for your first months as a franchisee.
  3. The final first round investment will be to cover the costs of the tangible assets regarding your Experimax Store Space and the equipment you will need to run the day-to-day business of your franchise. The investment amount can be anything between $15 000 and $30 000, as no two Experimax stores will be exactly alike, and as such will require different investments.

Other Fees

Initial investment fees aside, you’ll also be expected to pay a standard royalty fee – which is charged by most franchises – which we cap at 6% of your monthly revenue. The royalty fee is used primarily to fund our research and development of new technology, which helps us to provide you with a competitive edge.

You will also be required to contribute 1% of your monthly revenue for marketing purposes in your area. In terms of marketing spend, this fee provides you with marketing opportunities which would be far more expensive if you had to pay for them out of your own pocket.

It is important to remember that while these investments and fees might seem like a lot, you’ll still have to pay similar amounts to start your own business. The advantage of financing a franchise means that you have a crystal clear picture of the costs involved in running the business, while also benefitting from support that you might not have otherwise had access to.

If you need more information about financing a franchise with Experimax, feel free to contact us today.

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