Costs & finance

Fit-out

Fit-out is the work and cost of building a premises to the franchisor's brand and operational specifications, including construction, joinery, flooring, lighting, signage and fixtures, and it is usually one of the largest single items in a franchisee's establishment cost.

What it means

Fit-out turns a bare or existing tenancy into a trading outlet that meets the network's standard look and functional requirements. It covers building works, shopfront and joinery, equipment installation, flooring, lighting, signage and branding elements.

Franchisors typically specify fit-out standards tightly to keep the network consistent, and may require approved contractors or suppliers. This protects the brand but limits how much a franchisee can economise, so fit-out is often a fixed, non-negotiable cost.

Fit-out is a major component of establishment cost and, in food and retail, frequently the single biggest one. Because it involves construction, it is also the item most prone to cost overruns and delays, both of which increase the working capital a franchisee needs.

In practice

Get a detailed, itemised fit-out estimate and confirm what is and is not included, for example whether equipment, professional fees, and landlord works are inside or outside the quoted figure. Vague fit-out numbers are a common source of budget blowouts.

Factor in time as well as money. A fit-out that runs weeks late delays your opening and your first revenue while fixed costs such as rent may already be running, so build both a cost contingency and a timing buffer.

A real example

A franchisee leases an empty retail tenancy and the franchisor's specification requires approved shopfitters to install branded joinery, flooring, lighting and signage at a cost of $220,000. This is the largest line in the $355,000 establishment budget, and a six-week overrun on the build pushes back opening and increases the working capital needed to cover rent in the meantime.

Fit-out — FAQs

Why is fit-out so expensive?

It involves construction and brand-specific joinery, equipment and finishes built to the franchisor's standard, often by approved contractors. In food and retail it is frequently the single largest establishment cost.

Can I choose my own contractors to save money?

Often not entirely. Franchisors commonly require approved suppliers or specifications to keep the network consistent, which limits how much you can economise on fit-out.

Is fit-out included in the franchise fee?

No. Fit-out is separate from and usually much larger than the initial franchise fee, and forms part of the broader establishment cost.

What if the fit-out runs over budget or late?

Overruns increase your establishment cost and delays push back your first revenue while fixed costs accrue, so both raise the working capital you need. Always hold a cost and timing contingency.

See the full franchise glossary, the Fee Index or our buyer guides.