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Investment

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Franchise investment

How much do you need to invest in a franchise in the United States?

Real data from the Franchise Brokers Association (FBA), the Federal Trade Commission (FTC) and the International Franchise Association (IFA) to understand what a franchise costs and how to plan your investment.

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Overview

The investment depends on brand, industry and format

There is no single price. These are the benchmarks published by leading industry organizations:

IFA

From US$20,000 to over US$1 million

According to the International Franchise Association, total start-up costs range from US$20,000 or less to more than US$1 million, depending on the brand and whether you need to buy or lease real estate.

FBA

US$100,000 as a starting point

The Franchise Brokers Association notes that industry insiders often suggest a US$100,000 baseline to invest in a franchise. Options under US$50,000 tend to be service-based, home-based or without a storefront.

IFA · 2026

845,000 establishments

The IFA projects about 845,000 franchise establishments in the U.S. in 2026, nearly 8.9 million jobs and US$921.4 billion in economic output.

Breakdown

What does the initial investment include?

The FTC requires the franchisor to detail the estimated initial investment in Item 7 of the FDD and to give you that document at least 14 days before you sign or pay. These are the items the FTC says to review:

  • Initial franchise fee: according to the FTC, it can range from tens of thousands to several hundred thousand dollars and may be nonrefundable.
  • Location: rent, build-out and equipping the outlet.
  • Initial inventory, operating licenses and insurance.
  • Grand-opening fee paid to the franchisor, when applicable.
  • Salaries, training and required equipment.
  • Professional services: attorney and accountant.
  • Additional funds: working capital for the first months of operation.
After opening

Ongoing costs

Royalties

Around 6% of sales

FRANdata analyzed 2,425 brands from 2012 to 2018: the average royalty was 5.9% of gross sales, with 5.2% in food and 6.3% in other industries. The FTC warns they are owed even if the business is losing money.

Marketing

A percentage of sales

The FTC notes that advertising fund contributions are often a percentage of sales. It is usually disclosed in Item 6 of the FDD.

Other

Renewal, transfer and technology

Ongoing fees appear in Item 6 of the FDD. Also review the agreement term, which according to the FTC may last up to 20 years.

Planning

How to plan your budget

  1. Add a cushion

    The FBA recommends adding a 10% to 15% contingency to the build-out budget and getting three contractor bids.

  2. Cover your living expenses

    The FTC recommends estimating first-year operating expenses and your personal living expenses for up to two years.

  3. Be realistic about timing

    According to the FTC, opening may take several months and breaking even more than a year; some franchises never break even.

  4. Compare real figures

    Check your estimates against what current and former franchisees have paid, with help from an accountant.

  5. Review the full FDD

    Items 5 and 6 (fees), 7 (investment), 19 (financial performance) and 17 and 20 (term and units), as the FBA suggests.

  6. Ask how much you can afford to lose

    One of the questions the FTC recommends asking before you invest.

Financing

Financing for foreign investors

Since March 1, 2026, the SBA requires 100% of the owners of a 7(a) or 504 loan applicant to be U.S. citizens or nationals whose principal residence is in the U.S. As a result, foreign investors, including E-2 visa holders and lawful permanent residents, do not qualify for these loans and usually invest with their own capital.

Financing

General options and what to consider.

Read more →

Franchise costs

Item 7 line items and how to read them.

Read more →

E-2 visa

Investment requirements for the investor visa.

Read more →
Sources

Sources consulted

Data consulted in October 2026. Each brand’s figures change every year: always confirm the information in the current FDD.

Ready to review your case with a broker?

Book a session with a certified franchise broker and see which options fit your profile, budget and goals.

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!The information on this site is educational and general in nature and does not constitute legal, immigration, tax or financial advice. Every case is different: consult qualified professionals before making decisions.