Don’t have your Nedbank ID yet?
Nedbank ID single sign-on gives you full digital access to Nedbank’s banking and lifestyle products and services on the Money app or Online Banking.
Log in
Log in to Online Banking or another one of our secured services.
Bank how and when you choose to, with the low fees or extra benefits you want.
Shop online or instore and earn rewards for it, with up to 55 days interest-free credit.
Buy foreign banknotes, transfer funds or shop globally with a travel card.
Great interest rates, with great flexibility and access to your money when you need it.
Personalised interest rates for affordable loans from R2,000 to R300,000.
Loan up to 100% of the property value or up to 105% if you are a first-time home buyer.
Choose a plan for yourself, family or build your own cover to suit your needs.
Get cover for your car, building, house contents, valuables and more.
Cover your bond, credit card, overdraft, loan and car repayments.
Choose a plan for yourself, family or build your own cover to suit your needs.
Take the right steps to achieve your financial goals with expert financial planning.
Plan for everything you own and owe, so your estate is in order when you’re gone.
Accounts
-
Everyday banking Safety, convenience and rewards
-
Youth banking For under 16s, or under 25s
-
Accounts -
Digital wallet Your phone is your bank account
-
Private Wealth The globally integrated account
-
Goal saving Easy access to interest earned
Credit cards
Digital banking
Switch to Nedbank
Fraud awareness
Forex
Rewards
Accounts
-
On demand Money available at any time
-
In 24 hours Cash in your hand the next day
-
In 32 days Funds ready within a month
-
End of term Investments left until maturity
Investment services
Share trading
Personal loans
Home loans
Student loans
Overdrafts
Vehicle finance
Solar finance
Life cover
Funeral cover
Short term insurance
Credit Life
Travel insurance
Is your business covered?
Secure Investments
Financial planning
Estate, wills & trust services
Nedbank Private Wealth
Speak to a financial adviser
Blog
Talk to us
Find us
- Login & Register
- Online Banking
- Online Share Trading
- NetBank Business
- NedFleet
- Nedbank Greenbacks
- Nedgroup Investments
- Nedbank ID
- Bank
- Accounts
- Credit cards
- Digital banking
- Switch to Nedbank
- Fraud awareness
- Forex
- Rewards
- Explore Bank
- Accounts
- Everyday banking
- Youth banking
- Accounts
- Digital wallet
- Private Wealth
- Goal saving
- See all accounts
- Get help choosing
- Family Banking
- Refugees and asylum seekers
- FAQ
- How-to guides
- Everyday banking
- MiGoals Premium
- MiGoals Plus
- MiGoals
- Discontinued accounts
- Youth banking
- Nedbank4Me
- Digital wallet
- MobiMoney
- Private Wealth
- Private Wealth Bundle
- Goal saving
- MyPocket
- American Express
- Amex Gold
- Amex Platinum
- Digital banking
- Switch to Nedbank
- Fraud awareness
- Forex
- Send and receive
- Rewards
- Save & Invest
- Accounts
- Investment services
- Share trading
- Explore Save & Invest
- On demand
- Club
- Money Market
- Stokvel
- In 24 hours
- JustInvest
- PlatinumInvest
- Tax-free Savings
- MoneyTrader
- EasyAccess Fixed Deposit
- PrimeSelect
- In 32 days
- Electronic 32Day Notice
- 32Day Notice
- End of term
- Tax-free Fixed Deposit
- Electronic Fixed Deposit
- Electronic Optimum Plus
- Platinum Fixed Deposit
- Fixed Deposit
- OptimumPlus
- Investment services
- Share trading
- Borrow
- Personal loans
- Home loans
- Student loans
- Overdrafts
- Vehicle finance
- Solar finance
- Explore Borrow
- Personal loans
- Consolidation loan
- Secondhand car loan
- Home improvement loan
- Exclusive short-term loan offers
- Explore loans
- FAQ
- How to guides
- Consolidation loan
- Secondhand car loan
- Home improvement loan
- Exclusive short-term loan offers
- Home loans
- Building loan
- Switching home loan
- Repossessed properties
- Start your home buying journey
- Solar-energy Finance
- Earn R29,600 p/m or less? See offer
- HomeVision extra funds
- Home-buying Toolkit
- Managing your home loan
- Explore home loans
- FAQ
- How to guides
- Track application
- Building loan
- Switching home loan
- Repossessed properties
- Start your home buying journey
- Solar-energy Finance
- Earn R29,600 p/m or less? See offer
- HomeVision extra funds
- Home-buying Toolkit
- Managing your home loan
- Student loans
- Explore student loans
- Overdrafts
- Vehicle finance
- Solar finance
- Insure
- Life cover
- Funeral cover
- Short term insurance
- Credit Life
- Travel insurance
- Is your business covered?
- Secure Investments
- Explore Insure
- Life cover
- Get a call back
- Explore MyCover life
- Funeral cover
- Individual R10,000
- Individual R30,000
- Family Cover
- Build your own cover
- Get a call back
- Explore MyCover Funeral
- Individual R10,000
- Individual R30,000
- Family Cover
- Build your own cover
- Short term insurance
- Vehicle insurance
- Building insurance
- House contents insurance
- Valuables insurance
- Get a call back
- Explore MyCover short term insurance
- Vehicle insurance
- Building insurance
- House contents insurance
- Valuables insurance
- Credit Life
- Home loan credit life
- MFC Vehicle Finance Assurance
- Overdraft Assurance
- Balance Protection Plan
- Personal loan Assurance
- Get a call back
- Explore credit life
- Home loan credit life
- MFC Vehicle Finance Assurance
- Overdraft Assurance
- Balance Protection Plan
- Personal loan Assurance
- Travel insurance
- Is your business covered?
- Secure Investments
- Guaranteed Growth Plan
- Guaranteed Income Plan
- Get a call back
- Explore MyCover Funeral
- Guaranteed Growth Plan
- Guaranteed Income Plan
- Plan
- Financial planning
- Estate, wills & trust services
- Nedbank Private Wealth
- Speak to a financial adviser
- Explore Plan
- Financial planning
- Investment planning
- Insurance planning
- Give
- Retirement planning
- Investment planning
- Insurance planning
- Give
- Retirement planning
- Estate, wills & trust services
- Will drafting
- Ensure your estate is managed by an executor | Nedbank
- Trust services
- Financial accounting
- Tax services
- Leave the admin of your estate to us, and not to your loved ones | Nedbank
- Will drafting
- Ensure your estate is managed by an executor | Nedbank
- Trust services
- Financial accounting
- Tax services
- Leave the admin of your estate to us, and not to your loved ones | Nedbank
- Nedbank Private Wealth
- Speak to a financial adviser
- Learn
- Blog
- Explore Learn
- Blog
- Contact us
- Talk to us
- Find us
- Explore Contact us
- Talk to us
- Find us
Buying a franchise, you know certain costs upfront
Buying a franchise, you know certain costs upfront
Staff writer
Posted 15/03/2022 Updated 07/09/2023 4 mins
Knowing the costs in advance can be an easier way to start your own business.
Franchising is one way to achieve the dream of being your own boss while overcoming several barriers that often trip up young businesses. Top franchises offer an instantaneous boost through brand recognition, shared advertising and centralised buying (which lower your costs), and support with contract, legal and administration procedures.
But not all franchises are equal. The more popular brands may have the potential to make you the most money, but they’ll also be the most expensive to buy into. Which doesn’t make them a bad choice, but it does mean they require more start-up capital. Having a rough idea of what your initial and ongoing costs are going to be is one huge advantage that the franchise model offers when starting your own business.
Finding the franchise that best suits your budget and interests is a process that shouldn’t be rushed. You can find information on registered franchises on the Franchising Association of South Africa (Fasa) website.
Here’s what you need to understand about the costs involved when you sign up with a franchise. This information is generally available on the Fasa website, or you can request it from the franchisor.
Initial franchise costs
The following fees and costs are commonly known as your ‘total investment’ when starting up a franchise operation.
How much you’ll need depends on the agreement with the franchisor. The upfront fee, sometimes known as the joining fee, can vary from tens of thousands to hundreds of thousands of rand. What you get for that fee will vary from one operator to the other, but usually includes the rights to use the franchisor’s intellectual property, access to the approved franchisor manual for training, advice on selecting the best site, and so on.
Once your new business is operational, you’ll continue to receive support from the franchisor
After that, you need to have money to cover the actual set-up costs. This typically covers setting up shop and kitting it out with whatever equipment or décor is needed to run the business.
The final item for your budget is working capital. Without it your business is unlikely to survive very long. Working capital is the amount that the franchisor determines you need in reserve to cover your running costs until you start turning a profit, which is why it’s a key requirement when assessing and applying to join a franchise.
Ongoing franchise fees
Once your new business is operational, you’ll continue to receive support from the franchisor. The type of help varies from one franchisor to the next, with more established brands able to offer more in-depth support.
You pay for this support by way of the management services fee, or ‘royalty’ fee. This is paid every month and is usually calculated as a percentage of your gross sales or turnover, although some operators charge a fixed fee.
In return, you get ongoing support to run your business, build the brand, source products and materials, and conduct research and development. You’re also permitted to continue using their intellectual property – the brand identity – which is the cornerstone of successful franchising.
One final fee that may be levied by the franchisor is for the marketing services fund. This is a contribution every franchisee makes towards a combined marketing and advertising fund. It’s usually calculated as a percentage of your sales but might also be a fixed fee.
No matter how the franchisor chooses to calculate or levy these different fees, you have a distinct advantage over a business that doesn’t have such a clear view of expected costs. This means you can plan more thoroughly and be better prepared to cover these business expenses.
Certainty and clarity go a long way to setting your business up for success.
We have a dedicated franchising financing division that can help you when buying into a franchise. Get in touch today to find out how we can help you.