Franchise Costs By State

Costs of buying a franchise 

Do Franchise Costs Differ From State To State?

I’d like information on what the cost would be to buy a franchise in Michigan. Would the cost be more or less than another state?

Sorry, But Yes And No

First, you’ll find fees paid directly to the franchisor are consistent state to state. That said, Michigan is a ‘registration state.’ That means in order for a franchisor to sell franchises, it must meet requirements beyond those of the FTC. Therefore, it costs the franchisor more to do business in such states, but not the buyer.

Costs such as fees and royalties, are essentially the same regardless of the state. The greatest variable in franchise costs found geographically would be real estate (buy/lease), labor and other local expenses. In other words, business expenses beyond direct expenses to the franchisor.

Direct Purchase Costs: One Piece Of The Puzzle

Franchise costs are just one component of buying a franchise. Due diligence is a critical step and if you’re not experienced in franchising, get competent help. And before that stage, investigate what you want to do. Get help in the exploration if required. What’s going to make you tick as an entrepreneur? What are the business areas that excite you and keep you interested in pushing forward in your first-time business venture?

Read through our franchise articles, which include useful information on making financial decisions, including determining franchise costs. As part of your self-study, you may benefit from our Focus Program for Emerging Entrepreneurs, which offers a wealth of insightful articles, as well as audio guidance to help you establish your course and discover “your true entrepreneurial self.”