How much does a franchise really cost in Australia?
The advertised franchise fee is rarely the real number. Here is how to read the full cost of a franchise, and what each category actually runs.
How much does a franchise cost in Australia?
The four cost buckets
- Initial franchise fee, a one-off licence fee, commonly $25,000–$55,000.
- Establishment / fit-out, the physical build, equipment and vehicle; the biggest and most variable bucket.
- Ongoing fees, royalty and marketing levy, charged as a percentage of gross sales for the life of the agreement.
- Working capital, cash to cover wages, stock and rent before the site is cash-flow positive.
What the categories actually cost
Category medians from the Australian Franchise Fee Index (Q2 2026) give a reality check. Coffee & Café franchises show a 6.5% median royalty and run from about $118,000 all-in. Cleaning franchises carry a higher 9.0% median royalty precisely because entry costs are low. Fitness spans the widest range, driven by fit-out on large-format sites.
Ongoing fees compound
Royalty and marketing levy are charged on gross sales, so they scale with revenue for the whole term. A 1% difference in royalty on a $600,000-turnover site is $6,000 a year, over a 7-year term, $42,000. Small percentage differences are large dollar differences over time.
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Frequently asked questions
What is the cheapest type of franchise to buy in Australia?
Mobile and home-services franchises (cleaning, lawn care, trades) are typically the cheapest, with all-in costs often between $30,000 and $120,000 because they need little or no fit-out. They usually carry higher royalty percentages in return.
Why is the franchise fee lower than the total cost?
The initial franchise fee is only the licence to operate. The total cost adds establishment/fit-out and working capital, which together are usually far larger than the fee itself. Always ask for the all-in figure.
Are franchise royalties negotiable?
Rarely. Royalties and marketing levies are usually set uniformly across the network and disclosed in the disclosure document. What varies is the establishment cost, which depends on your site.
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