Guide · Startup costs · FDD Item 7
How Much Does a Franchise Cost?
Across 222 franchise systems with an Item 7 range in the current dataset, the middle disclosed starting range is $188K to $467K. That is a filing-based planning range, not a quote or a prediction.
The direct answer
FDD Item 7 combines the franchisor's estimated startup costs, including the initial fee and other pre-opening costs. In the 222 current records with a complete Item 7 range, disclosed minimums run from $0 to $25.0M at the far upper end; the range for one brand is not a forecast for another location.
- $188K
- Middle disclosed low end
- $467K
- Middle disclosed high end
- 66
- Systems starting below $100K
According to the Federal Trade Commission's franchise disclosure framework, Item 7 is the place to find the franchisor's estimated initial investment. It is more useful than the headline franchise fee because it is designed to show the full pre-opening range the franchisor expects a prospective franchisee to fund. PlainFranchise records the Item 7 range from the available FDD data and keeps the range separate from ongoing fees and any Item 19 revenue disclosure.
What Item 7 covers
Item 7 is a startup-cost disclosure, not an operating forecast. Read its line items alongside Item 5 (the initial franchise fee), Item 6 (other fees), and Item 19 when the franchisor voluntarily provides a financial performance representation. A low starting figure does not establish affordability, profitability, local demand, financing eligibility, or the cost of a particular site.
Where the current data sits
Average starting cost by sector
Sector-average Item 7 low end, cheapest to priciest
- Real Estate $35
Real Estate (8 brands)
$35 K average starting cost
- Business Services $64
Business Services (10 brands)
$64 K average starting cost
- Home Services $87
Home Services (31 brands)
$87 K average starting cost
- Senior Care $88
Senior Care (9 brands)
$88 K average starting cost
- Financial Services $92
Financial Services (2 brands)
$92 K average starting cost
- Tech & IT $143
Tech & IT (4 brands)
$143 K average starting cost
- Personal Services $149
Personal Services (4 brands)
$149 K average starting cost
- Education $223
Education (16 brands)
$223 K average starting cost
- Retail
Retail (31 brands)
$326 K average starting cost
- Pet Services
Pet Services (6 brands)
$371 K average starting cost
- Health & Fitness
Health & Fitness (15 brands)
$496 K average starting cost
- Automotive
Automotive (11 brands)
$707 K average starting cost
What this shows Real Estate systems average the lowest starting cost in this dataset; Automotive averages the highest. Sector averages hide the range within each sector, always check the individual brand's own Item 7.
How to use the range without over-reading it
- Start with the full low-to-high range. The low end is not a guaranteed all-in price, and the high end is not a maximum for every real estate market or buildout.
- Separate startup cost from ongoing fees. Royalty, advertising, technology, renewal, transfer, and other fees belong in Item 6 or the franchise agreement; they are not interchangeable with the Item 7 range.
- Read Item 19 as a disclosure, not a promise. When revenue information is available, it is gross revenue rather than franchisee profit and may describe only a stated subset of units.
- Verify the current FDD before acting. These figures are a research starting point. Review the brand's current filing and have a qualified franchise attorney and accountant assess the particular agreement and location.
Compare like with like
A cost comparison is strongest when the brands are being compared on the same disclosed basis: their Item 7 range, the Item 5 fee, Item 6 ongoing charges, and Item 19 disclosure status. The lowest starting range is therefore a useful filter, not a recommendation. Pair it with the system's outlet changes in Item 20 and the terms of the specific agreement before forming a decision.
Source: Publicly available Franchise Disclosure Documents, FDD Item 7 2024 Claims year FDD 2024. Amounts are franchisor disclosures, not editorial estimates.
Next steps
Use the Item 7 range to narrow a research list, then test the full disclosure rather than a headline cost.
- Compare the 50 lowest disclosed startup ranges, with the high end, franchise fee and royalty shown beside each brand. See lowest investment
- Read the FDD item-by-item before using any financial figure in a buying decision. Understand an FDD
- Compare two brands side by side after you have reviewed their current disclosures. Compare franchises
This guide is informational, not legal, financial, or investment advice. A disclosed range cannot predict a particular location's cost or outcome.