Initial Investment

What Initial Investment Means

The initial investment is the total estimated amount you’ll need to open and operate your franchise until it becomes self-sustaining. This amount appears in Item 7 of the FDD.

What the Investment Includes

The initial investment range typically covers:

• Franchise fee

• Build-out and construction

• Equipment and supplies

• Technology and software

• Signage

• Furniture and fixtures

• Permits and licenses

• Initial inventory

• Grand opening marketing

• Working capital

Why the Range Is Important

Item 7 provides a low-end and high-end estimate because costs vary based on:

• Location

• Real estate conditions

• Local regulations

• Size and type of the business

• Required equipment

• Labor costs during build-out

Prospective franchisees use this range to plan financing and assess affordability.

Working Capital

One of the most important components of Item 7 is working capital—the funds needed to operate the business until it becomes cash-flow positive. Underestimating this amount is a common reason new franchises struggle.

Legal Disclaimer

This content is for general informational purposes only and does not constitute financial, investment, or legal advice. Always consult with qualified professionals before making financial decisions.