You’re thinking about opening a restoration franchise, but now as you begin to research, you’re noticing lots of dollar signs. It can be challenging to decipher the true costs. Plus, everything’s adding up quickly.
Curious about what your restoration franchise costs will be? Here are five expenses you can expect.
1. Initial Franchise Fee
A franchise fee is your cost of entry into the brand. The payment unlocks the door to the franchisor’s proprietary business systems and gives you the licenses to own and operate under their franchised business name.
The service industry tends to have lower franchise fees and initial investment costs. Restoration companies’ initial franchise fees typically range from $29,000 to $122,000.
On average, most franchise fees in this sector top out at about $60,000.
Unlike restoration companies, N-Hance, the no. 1 wood refinishing franchise, has a lower initial franchise fee. Our fee ranges from $17,123 to $46,050, per franchise.
2. Royalty Fees
The royalty fee is your payment to use someone else’s idea, like a trademark. This fee is also where the franchisor makes its profits.
Typically, this fee is a percentage of your revenue ranging from 4% to 12%. With N-Hance, we charge a flat rate for our royalty fees. They range from $209-$786, no matter how much revenue you bring in.
3. Marketing Fees
Another monthly, ongoing restoration franchise cost is marketing fees. Like royalty fees, marketing fees are also based on a percentage of your revenue, although some companies have minimum or flat fees. Marketing fees usually range from 1% to 3% of your gross revenues. You will more than recoup these fees if your franchisor’s marketing strategy is effective.
Similar to the royalty fees, N-Hance charges a flat rate for marketing fees of $220.
4. Equipment Costs
Upfront equipment costs can be expensive for a restoration business. Your equipment is your prized possession when it comes to service. It’s how you get your work done. Equipment costs can range from $5,000 to $50,000 or more.
At N-Hance, our initial new business set, equipment, and product package costs $38,500.
5. Licenses, Certifications, Training
When it comes to licenses, certifications, and training, this is where you can really see the difference between starting your own business and buying into a franchise. Typically, franchise fees cover any licensure, certifications, and training you need. However, you would pay for all these costs out of pocket if you were to start your own company.
Travel expenses for training, telephone and business licenses, permits, and other licensing with N-Hance can range from $2,100 to $13,000.
The many financing options available in franchising can help make those restoration franchise costs a bit more manageable. Some franchises partner with third-party lenders, and some may offer in-house financing. Many banks or credit unions will shy away from lending money to a new business. But if you’re partnering with a franchise with a solid track record and proven business model, lenders will be more eager to finance you.
While N-Hance is not a full restoration company, we offer in-house financing options with benefits if you pay it off quicker. Our financing program allows you to put 60% down on the initial franchise fee and 40% down on equipment costs and finance the remaining balance over five years. If you pay off the entire amount in the first six months, you’ll receive a 12% discount on the initial franchise fee.
N-Hance vs. Restoration Companies
So, if you’re thinking about opening a restoration business, consider a wood refinishing company like N-Hance. Home remodeling is a $450 billion industry, while the restoration service industry is $210 billion. The U.S. Census Bureau finds more than 140 million homes in the country. In all those homes are cabinets and wood floors that will eventually need refinishing. Meanwhile, restoration companies focus on projects after natural disasters like flooding or fires.
N-Hance is not just a kitchen remodeling franchise. We offer wood refinishing and restoration services for both cabinets and flooring. If the prospect of owning a turnkey franchise with a proven business model and ongoing support is intriguing, go ahead and request more info today.