Owning a business coaching franchise is an exciting and possibly nerve-wracking prospect for aspiring entrepreneurs. That’s why before taking the leap and diving headfirst into the world of owning a business coaching franchise, it is a good idea to consider the costs associated with such a venture. When evaluating the cost of owning a business coaching franchise, it is vital you consider all the costs involved. From the cost of buying the franchise, to the ongoing fees, and how much time you’ll need to invest.
In this article, we are going to discuss some of the common costs that come with owning a business coaching franchise, so you can feel confident in your purchase and know you will be able to take on the world of business coaching from the day you buy a franchise, and well into the future.
The Initial Purchase Price
The initial purchase price of buying a business coaching franchise will vary from franchise to franchise. For example, at ActionCOACH, we have four franchise models you can buy into; They are The Pro, The Practice, The Premium and The Firm. Prices for buying an ActionCOACH franchise start at $30,250 for The Pro, and go up to $330,000 for The Firm. So, the initial purchase price you will pay for your business coaching franchise will depend on the size of practice you are looking to run.
The Cost of Your Time
When you buy a business coaching franchise, it is important to remember you will also be investing time to get your business up and running in the first few months. This may mean you invest your first few months in the business, networking to build your brand, creating a marketing plan and sourcing leads. It may take 2 or 3 months to secure the number of clients you need to replace your current income so be prepared for that to happen. However, in time, you will begin to win new clients on a regular basis and recoup the costs of the time you spent getting your business up and running.
Ongoing Fees and Royalties
Business coaching franchises also come with ongoing fees such as monthly royalties over the term of your contract. Some franchises base royalty fees off of your monthly earnings, while others offer fixed royalties. At ActionCOACH, we offer fixed monthly royalties for the term of a franchisee’s contract for the Practice, Premium and Firm levels and percentage of revenue for the Pro level. In addition to monthly royalty fees, when you buy a business coaching franchise, you are generally responsible for any fees and costs associated with attending mandatory annual conventions and training programs.
The Term of the Contract
Depending on the type of contract and the business coaching franchise you buy, it is likely you will need to pay a renewal fee at the end of your contract. This will generally be only a small percentage of the initial franchise purchase, typically around 5%. Most franchises offer a Franchise Agreement for five to ten years. Franchisees are then usually eligible to renew their contract for an additional term, provided they have conducted their franchise in compliance with the terms of their agreement.
Training fees are an upfront payment that can cost anywhere from $10,000 to $30,000 depending on the franchise you choose. This is the cost of a preparation program, the initial full-time induction training and generally a ‘first 3 months’ program as well..
Material Costs, Office Space and Staff
When buying a business coaching franchise, some franchisors may require you to buy a website, software, marketing and branding materials and more. That is why it is important to read the contract in depth, and ask any questions if you are unsure. Furthermore, depending on the type of business coaching franchise you buy, you might also need to pay for costs relating to office space, the hiring of staff and additional costs to make your business run as efficiently and smoothly as possible, although those costs are generally 1 to 2 years down the track at the earliest.