How Much Does it Cost to Start a Franchise?
There are an estimated three quarters of a million franchises in the U.S. alone. While most people think of franchising in terms of fast-food restaurants, the U.S. Census Bureau notes that a number of other industries including fitness, beauty, and automobiles also rely on a franchise model to generate business. Our latest visualization illustrates how much it would cost to open one of the top 20 U.S. franchises based on initial investment requirements.
This data for this visualization comes from Entrepreneur’s 40th annual Franchise 500® list. The methodology behind the ranking includes five main factors: costs & fees, size & growth, support, brand strength, and financial strength & stability. The final results were determined based on information provided by 1,094 franchisees nationwide. We used the investment information collected by Entrepreneur to map out the low-end investment cost and the high-end investment cost for the top 20 franchises.
How Much Does it Cost to Start a Franchise? - Top 10
1. McDonald’s - $1,058,000 to $2,230,000
2. Dunkin’ - $228,621 to $1,717,103
3. Sonic Drive-In - $865,000 to $3,641,300
4. Taco Bell - $525,100 to $2,622,400
5. The UPS Store - $168,885 to $398,323
6. Culver’s - $2,043,000 to $4,652,000
7. Planet Fitness - $969,600 to $4,242,500
8. Great Clips - $136,900 to $258,250
9. Jersey Mike’s Subs - $178,523 to $746,342
10. 7-Eleven - $47,050 to $1,165,400
Most of the franchises on the top 10 list are in the food and beverage industry, with Great Clips, The UPS Store, and Planet Fitness being the notable outliers. Among the franchises in the top 20, Culver’s has the largest spread, with a $2.6 million difference between the lower end of investment and the higher end. By contrast, Kumon Math & Reading Centers had the smallest spread, with only a $79,382 difference. Within the top 20, Culver’s has the most expensive investment costs at both the low end ($2,043,000) and the high end ($4,652,000). At $40,000, REMAX has the lowest potential investment cost on this list. Keep in mind, these numbers do not take into account operating costs or ongoing royalty fees, so the total cost of owning a franchise will be much higher.
Curious to see how much does it cost to start a franchise by location? Check out another visualization here to see initial investment costs for franchises headquartered in different states.