When people think of franchises, they often think of fast food chains that could cost more than a million dollars to start. A McDonald’s franchise, for example, requires a minimum of $750,000 in liquid assets. While signup costs include the cost of construction and equipment, they can range from $1 million to $2 million depending on location. The good news is that once the business is operating smoothly, revenues average around $2.5 million a year. Is franchise ownership something to consider?
While the idea of opening up a fast food restaurant can be profitable, the cost of entry is what prevents most people from making the leap to having their own business. Unless they are already established business people, it’s difficult to get a bank loan large enough to cover initial costs.