Franchise Cost Calculator

What is included in the total initial investment?

This tool uses franchise fee + setup and fit-out cost + working capital. With the defaults ($35,000 + $80,000 + $25,000) that is $140,000.00. Anything you do not type into one of those three boxes, such as licences, deposits, inventory or pre-opening wages, is not counted unless you fold it into one of them.

How are the monthly franchise fees calculated?

Monthly fees = estimated monthly revenue × (royalty rate + marketing fee rate) ÷ 100. Both rates are applied to the same revenue figure and added together, so 6% and 2% on $45,000 gives 8.0% and $3,600.00 a month. The tool does not model minimum royalties, flat fees, tiered rates or fees charged on anything other than the revenue you enter.

What does the Year-1 figure at the bottom mean?

It is investment ÷ 12 + monthly franchise fees: the monthly amount you would need to bring in to spread the upfront spend over twelve months and pay the fees. It is not a break-even revenue, because rent, wages, stock and every other running cost are missing. Earlier versions labelled it revenue needed to break even and returned 0 when revenue was 0; it is now labelled as a cost to cover and always calculated.

What is “Annual total cost (Year 1)”?

The total initial investment plus twelve months of royalty and marketing fees. For the default inputs that is $140,000.00 + 12 × $3,600.00 = $183,200.00. It is a cost figure only. It does not subtract any income, and it treats working capital as spent although some of it may remain as cash.

What happens if I enter zero revenue or negative numbers?

Every input is limited to zero or above, so a negative entry is treated as 0. With revenue at 0 the monthly fees are $0.00, the Year-1 figure is just investment ÷ 12 ($11,666.67 for the defaults), and the effective fee rate still shows the sum of your two percentages.

Where should the numbers come from?

From the franchisor’s franchise disclosure document and your own quotes, which are the authoritative sources. The defaults here are placeholders to show how the arithmetic works. They are not typical, average or recommended amounts for any franchise, and the tool says nothing about any brand’s actual fees.

Does it estimate profit or return on investment?

No. It has no field for the margin on your sales, wages, rent, loan interest or taxes, so it cannot estimate profit, payback time or return. Use it to see the size of the upfront cheque and the percentage of revenue the franchisor takes, then build a fuller budget separately.