Of course, this phase also requires funding for which you are responsible. The initial costs that need to be financed are generally incurred up to the point where the first franchisee is recruited.
The typical initial costs associated with the development phase are:
- General development costs – market research, professional fees, insurance, and protection of the brand and other intellectual property.
- Franchise package development costs – includes the creation of the systems, processes, training programmes and operations manuals.
- Recruitment costs – production of your prospectus, advertising, franchise exhibitions, and interviewing expenses.
The franchise investment needed to fund these elements will vary massively depending on factors such as the type of business and how many amendments need to be made to the pilot operation.