A Look at the Costs of Becoming a Franchisee | VetCor

For those who are interested in owning their own franchise, understanding the funding requirements and fees involved is one of the most important parts of getting started. While there are many resources for gaining the funding you need to start a franchise, it is important to know exactly what fees you can expect to pay and what they will cover throughout the process.

When you are doing your research on franchises, you may see terms like “franchise fee,” “royalty percentages” and “working capital” thrown around without context—which can be quite confusing! Here, we examine those in-depth so you are able to know exactly what they mean and can ask further questions when you chat with your franchisor.

The Various Costs Associated With Franchise Ownership

The Franchise Fee. The franchise fee is the upfront fee paid by the franchisee to gain the rights to utilize the franchisor’s branding, begin operations and access the plethora of training and resources now available to you. When you pay your franchise fee, you are officially a franchise owner within the system and can begin the fun process of building your business.

Royalty and Advertising Fees. Royalty and advertising fees are ongoing fees that franchisees typically pay based on their gross profits each month. The royalty fee is paid to the franchisor and goes toward general brand upkeep, system improvements and other programs to provide more resources for franchisees. Advertising and marketing fees are generally less costly, and they cover things like print and digital advertising to help bring attention to your brand.

Supplies and Equipment. You cannot do business without the proper supplies and equipment, so it is important to ask your franchisor what the cost of these will be. Generally you are able to lease or purchase these at cost directly from your franchisor to make it as easy as possible to get started.

Working Capital Costs. While the return on investment is great for VetCor franchisees, it is still a good idea to retain some working capital for the first few months of operation to cushion your business budget. We can work with you to determine exactly how much working capital you should set aside for the first few months that your franchise is up and running.

Are you ready to learn more about how you can invest in a VetCor franchise? We’d love to talk to you!