Franchising can seem like a fast-track to business ownership. You get a recognized brand, a blueprint to follow, and built-in support. But before signing on the dotted line, you need to answer a critical question: “How much does it cost to buy a franchise in 2025?”
The short answer? It varies wildly. The real answer? It’s often more than what you see advertised.
In this guide, we break down the full range of costs, from upfront franchise fees to hidden ongoing expenses. You’ll also get real-world examples, financial breakdowns, and expert guidance to help you make the smartest move for your money.
→ Before you commit six figures, schedule a free consultation with Azgari.com Click here to book now
1. Average Franchise Startup Costs in 2025
According to updated industry data, here are the average startup costs to buy a franchise in the U.S. in 2025:
Startup Investment Ranges
| Franchise Type | Low-End Cost | High-End Cost |
| Service-Based | $50,000 | $150,000 |
| Food & Beverage | $250,000 | $1.5 million |
| Retail | $200,000 | $800,000 |
| Fitness Studio | $100,000 | $500,000 |
Key Components of Franchise Startup Costs
- Franchise Fee: $20,000–$75,000
- Leasehold Improvements: $25,000–$300,000
- Equipment/Supplies: $10,000–$100,000
- Training & Travel: $3,000–$10,000
- Insurance & Licensing: $1,000–$5,000
- Working Capital: $20,000–$100,000
→ Want a breakdown for a specific brand? Azgari offers free franchise cost analysis
2. Real-World Franchise Cost Examples
Example 1: Subway
- Franchise Fee: $15,000
- Startup Total: $250,000–$400,000
- Royalty Fee: 8% of gross sales
- Ad Fund Fee: 4.5%
Example 2: Two Men and a Truck (moving services)
- Franchise Fee: $50,000
- Total Investment: $150,000–$400,000
- Royalty Fee: 6%
- Ad Fund Fee: 1%
Example 3: Anytime Fitness
- Franchise Fee: $42,500
- Total Startup Cost: $400,000–$700,000
- Royalty Fee: 7%
- Ad Fund Fee: 2%
These examples highlight just how diverse franchise investment levels can be—even within the same industry. Many business owners report additional unforeseen costs after opening, such as upgrades, mandatory remodels, and compliance expenses not originally budgeted.
3. Hidden or Ongoing Franchise Costs to Watch
Don’t let the startup number fool you. Most franchisees underestimate these ongoing costs:
1. Royalty Payments
A percentage of your gross revenue (not profit), paid monthly. This can significantly impact net income, especially in the first few years of operations.
2. Marketing Fund Contributions
Often 1–4% of revenue, used for national or regional advertising, which may not always benefit your local operation.
3. Mandatory Vendors and Technology Fees
You may be required to use overpriced POS systems, uniforms, booking platforms, or software that are locked in via franchise agreements.
4. Renewal or Transfer Fees
Franchise contracts usually last 5–10 years. Renewals often cost $5,000–$15,000. Transfers (if you sell) can trigger a fee or approval process, and some franchisors retain the right to reject your buyer.
5. Training Travel Costs
Even though training is required, you often pay for airfare, lodging, meals, and time off work. This adds thousands in real cost to your launch timeline.
→ Want help calculating total 5-year cost of ownership? Book an Azgari financial call
4. Franchise Financing Options in 2025
Buying a franchise can feel out of reach without financing. Here are common options in 2025:
SBA Loans
- Up to $5 million
- Low interest, long repayment terms
- Franchisor must be on the SBA-approved list
- Typically require 10–20% down payment
ROBS (Rollovers as Business Startups)
- Use your 401(k) to invest without penalties
- Must form a C-Corp and follow IRS rules
- Often used by corporate employees transitioning to entrepreneurship
Franchisor Financing
- Some brands offer payment plans for the franchise fee
- Limited availability and usually short-term
Equipment Leasing
- Lower upfront cost
- Pay monthly for vans, machines, or technology required to run the business
→ Need help securing an SBA loan or using your 401(k)? Azgari guides clients through the full process
5. Franchise vs. Independent Startup: Cost Comparison
Franchising isn’t the only way to start a business. Here’s how it compares to Azgari’s $25K Independent Startup model:
| Category | Franchise | Azgari Independent Setup |
| Initial Cost | $150K+ | $25K |
| Royalties | 5–10% | $0 |
| Ad Fees | 1–4% | $0 |
| Vendor Lock-in | Yes | No |
| Territory Limits | Yes | Unlimited |
| Brand Control | Limited | Full |
Franchising gives you a pre-set model, but at a premium. Azgari’s clients own their business outright with full flexibility.
6. Other Financial Considerations Before You Buy
Due Diligence Costs
Hiring a franchise attorney and accountant to review the Franchise Disclosure Document (FDD) is critical—and can cost $2,000–$4,000 upfront.
Cash Flow Planning
Most franchisees will not be profitable for 6–18 months. Budget at least 6 months of working capital and personal expenses.
Local Licensing & Compliance
Cities and states may require additional permits, inspections, or certifications depending on your industry.
Real Estate Costs
If your franchise requires a storefront or office, include lease deposits, tenant improvements, and property taxes in your budget.
7. Is a Franchise Worth the Cost?
Pros:
- Proven system
- Established brand
- Easier to get financing
Cons:
- High upfront and ongoing costs
- Less creative and operational freedom
- Revenue-sharing reduces take-home profit
Many first-time business owners like the idea of a franchise but later feel trapped by contracts, restrictions, and royalties.
→ Not sure if a franchise is worth it for you? Azgari offers franchise vs. startup comparisons
8. Azgari’s $25K Business Concierge: A Lower-Cost Alternative
If franchise costs feel too steep or risky, Azgari offers a full-service startup launch for just $25,000.
What’s Included:
- Custom branding and website
- Legal setup (LLC, EIN, licensing)
- Business coaching
- Marketing strategy
- Lead generation systems
- Growth roadmap with territory scaling
- Access to Azgari’s U.S. startup expert network
You own 100% of the business. No royalty, no contracts, no limitations.
Popular Industries Azgari Supports:
- Pressure washing
- Handyman services
- Cleaning businesses
- Mobile car detailing
- Appliance repair
- Lawn care and landscaping
→ Let’s talk about launching your own service business with full support. Book your free call here
Conclusion: Know the True Costs Before You Buy
In 2025, buying a franchise can cost anywhere from $75K to over $1 million, depending on the brand, territory, and market. But the real cost goes far beyond the franchise fee. Between royalties, ad fund payments, required vendors, and renewal fees, many franchisees end up investing much more than they expected.
The key is to get the full financial picture before committing. Whether you go franchise or build independently, Azgari can help you run the numbers, weigh the pros and cons, and launch a profitable business with clarity.
→ Get expert help evaluating your options. Book a strategy session now
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