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Franchisees must pay 40% of the startup costs with cash and other non-borrowed resources, while the rest can be financed. In addition to those costs, McDonald's charges a $45,000 franchisee fee and an ongoing monthly service fee equal to 4% of gross sales. Franchisees must also pay rent to the company, which is a percentage of monthly sales. Reuters.
The total financial cost of opening a franchise can range between $1.2 million and $2.2 million, depending on location, building size and any updates or upgrades that need to be completed. The initial franchise fee for a Burger King is $50,000, which must be paid prior to the opening date of the location. Once the restaurant opens for business, a monthly royalty fee of 4.5 percent of gross sales is required by the parent company.