The first thing you need to do is determine the total cost for the franchise you are considering.
“Always plan for more expenses than you think you'll have,” said Betty Otte, management counselor and franchising specialist with the SCORE chapter in Orange County, Calif. “New franchisees are notorious for having very high expectations for their businesses. It may take two to three years before you see a profit and if you don't plan for that, you may sink before you have a chance to swim.”
According to the International Franchise Association, a good rule of thumb is that “it costs twice as much and takes twice as long.” It is important to reserve a backup of cash until the business becomes profitable.