Hot opportunities on Main Street
There's a lot of appeal in the idea of running your own business — especially when that business is part of a national chain that's supported by multimillion-dollar national ad campaigns.
Franchise growth was stronger than expected in 2015, and the International Franchise Association expects that expansion to continue this year by 1.7 percent. Assuming the group is right, that means the year will finish with 795,932 franchised businesses operating in the United States.
The industry is a key contributor to GDP, contributing $1 trillion annually, according to the IFA.
Getting started as a franchise owner isn't necessarily easy, though. Start-up costs vary wildly, depending on what sort of store you want to open, how upscale you decide to make it and where it's located.
Franchise Direct has assembled a list of the start-up costs and fees for a number of big corporate names, based on the franchise disclosure documents of those companies. Here's a look at what you can expect to pay to buy one of these iconic franchises.
— By Chris Morris, special to CNBC.com
Posted 28 June 2016
McDonald's
Estimated number of franchises: 36,290
Initial franchise fee: $45,000 for a traditional stand-alone restaurant
Estimated initial investment: $989,000–$2.2 million
Service fee: 4 percent of gross sales
Advertising fee: No less than 4 percent of gross sales
Subway
Estimated number of franchises: 42,230
Initial franchise fee: $15,000
Estimated initial investment: $117,000–$263,000
Service fee: 8 percent of gross sales
Advertising fee: 4.5 percent of gross sales
Pizza Hut
Estimated number of franchises: 15,605
Initial franchise fee: $25,000
Estimated initial investment: $852,000–$2.1 million for red roof dine-in restaurants (Delivery/carry-out locations range from $297,000–$528,000)
Service fee: 6 percent of gross sales
Advertising fee: 2.5 percent–3 percent of gross sales
7-Eleven
Estimated number of franchises: 56,450
Initial franchise fee: $0–$1 million
Estimated initial investment: $40,000–$1.1 million
Service fee: Variable percentage of gross sales
Advertising fee: Variable percentage of gross sales, based on previous year's profit
Wyndham Hotels and Resorts
Estimated number of franchises: 7,760
Initial franchise fee: $90,300
Estimated initial investment: $36.7 million–$70 million (excluding land acquisition costs)
Service fee: 5 percent of gross room revenues
Advertising fee: 3 percent of gross room revenues
Dunkin' Donuts
Estimated number of franchises: 11,750
Initial franchise fee: $40,000–$90,000 (freestanding unit)
Estimated initial investment: $250,000–$1.7 million (freestanding unit)
Service fee: 5.9 percent of gross sales
Advertising fee: 5 percent of gross sales
Baskin-Robbins
Estimated number of franchises: 7,610
Initial franchise fee: $12,500–$25,000
Estimated initial investment: $94,000–$402,000
Service fee: 5.9 percent of gross sales
Advertising fee: 5 percent of gross sales
Century 21
Estimated number of franchises: 6,900
Initial franchise fee: $0–$25,000
Estimated initial investment: $11,000–$605,000
Service fee: 6 percent of gross revenue
Advertising fee: N/A
The UPS Store
Estimated number of franchises: 4,865
Initial franchise fee: $29,950
Estimated initial investment: $168,000–$536,000
Service fee: 5 percent of gross sales and commissions
Advertising fee: 2.5 percent of gross sales and commissions
Gold's Gym
Estimated number of franchises: 710
Initial franchise fee: $32,000–$40,000
Estimated initial investment: $1 million–$4 million
Service fee: Either 5 percent of gross revenue or $2,000 per month, whichever is higher
Advertising fee: N/A