can you tell me he difference between franchise fee, startup capital and investment required. all of them had different amounts and i searched it up online. but i couldn't understand it because it kept repeating and repeating the same thing but it didn't get to the point.
so can you explain it in simple terms that is easy to understand
http://www.entrepreneur.com/article/51174
http://www.investopedia.com/terms/s/startup-capital.asp
http://www.forbes.com/sites/ryancaldbeck/2012/09/18/5-essentials-of-small-business-investing/
Of course! I'd be happy to explain the difference between franchise fees, startup capital, and investment required in simple terms.
1. Franchise Fee: This is a one-time fee that you pay to the franchisor (the company that grants you the right to operate their business) in order to become a franchisee. It's essentially the cost of getting the license to use the franchisor's brand, trademarks, and business model. Franchise fees vary greatly depending on the brand and industry, and usually range from thousands to several hundred thousands of dollars. It is important to note that the franchise fee does not cover all the costs of starting and running a franchise.
2. Startup Capital: Startup capital refers to the total amount of money needed to start a new business, including all the initial expenses required to launch the franchise. It encompasses various costs such as real estate, equipment, inventory, leasehold improvements, licenses and permits, marketing, initial employee salaries, legal fees, and more. Startup capital is different from the franchise fee because it covers all the necessary expenses to get your business up and running, not just the fee to acquire the franchise rights.
3. Investment Required: The investment required refers to the overall financial commitment you need to make to establish and operate a franchise successfully. It includes both the franchise fee and the startup capital. The investment required also takes into account ongoing expenses such as royalty fees, advertising fees, and other operating costs that you'll need to cover to keep the franchise running. It is crucial to carefully consider and understand the investment required before committing to a franchise opportunity.
In summary, the franchise fee is the one-time payment you make to acquire the rights to operate a franchise. Startup capital refers to the total amount of money needed to launch the franchise, including initial expenses. Lastly, the investment required encompasses both the franchise fee and the startup capital, and also considers ongoing costs.