How Much Money Do I Need To Open a Retail Franchise?

Generally speaking, the cost to open a franchise is between $50,000 and $200,000. However, the franchise brand and industry, and the physical location of the business, if applicable, are three major factors that can impact the total cost.

Retail franchises tend to skew toward the higher end of the range or may exceed the range altogether, as they require more inventory and storage space than other concepts like a mobile maid service or handyman business. According to Entrepreneur, the initial investment for some retail concepts can reach the multi-million mark.

Here are a few popular retail franchises and their estimated initial investment.

• The Vitamin Shoppe, $493,000 – $945,000
• 7-Eleven, $125,000 – $1.3 million
• Rent-A-Center, $363,000 – $570,000
• Big Frog Custom T-Shirts & More, $123,000 – $268,000
• Pet Supplies Plus, $455,000 – $1.5 million

Though there are some unavoidable costs associated with retail models, they do not necessarily have to be more expensive — in the long run — than another franchise iteration.

The ramp-up requirements as owners prepare to open the doors of a physical store can be more demanding, and facing all of the requirements at once can certainly feel like a lot. Rather than simply purchasing a vehicle and a few pieces of equipment, retail owners must establish their location, ensure branding is accurate inside and out, stock the product, organize any extra product that is being stored and build out a strong team to win on opening day.

Long-term, however, the highest costs will be staffing and real estate. 

When considering opening a franchise, the prospective franchisee should consider the initial cost, how that total breaks down and which costs will and won’t change over time.

Retail requires more space. It’s that simple. More space comes with a higher cost during the build-out phase, but it will also likely bring a higher monthly rent. 

A similar idea stands with staffing. Building out a team for the opening day may be costly as there is a level of recruitment and investment in training required. However, maintaining a larger team over time will naturally increase labor costs.

Each franchisor will have unique requirements in terms of total initial investment and the franchisee’s net worth and liquid capital; there is no one-size-fits-all answer. However, making considerations for the unique challenges and requirements associated with the retail structure can begin to point you in the right direction as you develop a better understanding of what will be required.