What’s included in a franchise fee?

22NOV

All new franchise journeys start with a Franchise Fee but what is a franchise fee? What is included and what do you get for your money?

If you’re interested in starting your own business, you may have considered franchising. Franchising is a great way to set up your own business doing something you love whilst having the support of a Head Office and existing Franchisee Network behind you – not to mention a business model that has already been proven to work!

Here are the answers to some frequently asked questions about franchises and franchise fees for those considering joining the £17.2 billion UK franchise industry!

What is a franchise?

Simply put, a franchise is a tried and tested business model that can be replicated in any given new location.

What is a franchise fee?

A franchise fee is a fixed sum of money you pay to join a franchise. The fee is paid by the potential franchisee (person setting up a new business) directly to the Franchisor (owner of the existing business model).

Payment of the fee gives you the right to set up your business using the name, logo and services/products of an established business model in a specified area or territory that you will operate in.

Other terms and conditions may apply and will very by business.

What is covered by a Franchise fee?

In short, the franchise fee covers everything you, as a new business owner needs to get set up and running

Brand Name
Logo - Services/Products
Equipment (The stationery, tools, and kit needed to deliver your service/products to customers) - Website
Marketing materials
Area of operation (territory) - Advice, support & training

Note the Franchise Fee does not include VAT.

The franchise fee gives you access to an established and resilient business model that has proven profitable elsewhere. The franchisor (owner) has experience in navigating the challenges of the market they operate in so is able to provide invaluable advice and support as you enter a new business arena - great for those who want to take on a business with less risk than you would typically face going it alone.

What other costs do I need to consider as a franchisee?

On top of the initial franchisee fee, you will need to allow for any admin or management fees that need to be paid to the franchisor and on-going business running costs such as marketing, staffing and licencing. These additional costs vary depending on the type of and size of franchise you join but management fees will usually be a percentage of your revenue.

You should allow for the following costs of running your business:

Production of marketing materials to promote your business
Public Liability insurance and EmployersLiability insurance if employing staff.
Registering for Data Protection NB: The specific licencing and regulations you are required to meet will vary by the industry you are joining but your franchisor will be able to guide you though this as you discuss your business venue.

If you’re interested in working with children and enjoy teaching through singing and music, Jo Jingles could be the perfect franchise opportunity for you. Find out how much a Jo Jingles franchise costs and how to come on board by getting in touch with our Franchise Recruitment Team.

Category: Start a business

This article is from the Jo Jingles business blog series.

You may also be interested in these other articles from our business blog series

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Jo Jingles provides music, singing and movement classes for children aged 3 months to five years across the UK. Our fun, interactive and educational classes are run by experienced class teachers at more than 700 centres nationwide.

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