Key takeaways
- Franchise startup costs in Australia range from about $20,000 for a mobile/home-based model to $1 million-plus for a large food franchise.
- Beyond the one-off franchise fee, budget for fit-out, equipment, working capital, professional fees and ongoing royalties (typically 4–12%) plus a marketing levy (2–6%).
- The cost most budgets underestimate is labour — usually the single biggest ongoing expense.
- Controlling labour cost through demand-based rostering is the main lever on whether the franchise ever makes money.
The cost of opening a franchise in Australia ranges enormously — from about $20,000 for a mobile or home-based model to $1 million or more for a large food franchise with a full fit-out. Most storefront franchises land somewhere in the $150,000–$600,000 band. But the sticker price is only the entry fee: the numbers that decide whether the business actually makes money are the ongoing costs — royalties, rent and, above all, the franchise workforce management and labour bill that most budgets underestimate. This guide breaks down every cost, by sector, so you can budget with real numbers.
Franchise startup costs at a glance
- Total to open:
~$20,000 (mobile) to $1M+ (large food franchise); most storefronts $150,000–$600,000
- One-off franchise fee:
Commonly $15,000–$60,000, but varies widely by brand
- Ongoing fees:
Royalty 4–12% + marketing levy 2–6% of gross sales
- The cost budgets miss:
Labour — usually the single biggest ongoing expense, and the one you can control
Before you commit, Australia’s Franchising Code of Conduct (administered by the ACCC) requires the franchisor to give you a disclosure document with the key financials. Always verify every figure below against that document — the ranges here are indicative and were last verified in July 2026.
What makes up the cost of opening a franchise
Every franchise cost falls into two buckets: upfront (paid once, to open) and ongoing (paid forever, out of revenue). The upfront costs are the ones most people budget for:
- Initial franchise fee — the one-off cost to join the brand, commonly $15,000–$60,000.
- Fit-out and construction — usually the biggest line for a storefront: from tens of thousands for a small kiosk to $1 million-plus for a drive-thru restaurant.
- Equipment and inventory — ovens, fridges, POS systems and opening stock.
- Working capital — cash to cover wages, rent and bills before the store turns a profit; typically $30,000–$150,000.
- Professional fees — legal review of the franchise agreement, accounting and due diligence.
Indicative total cost to open a franchise by sector (Australia, verified July 2026)
| Franchise type | Typical total investment (AUD) |
|---|---|
| Mobile / home-based (e.g. lawn care, cleaning) | $20,000–$60,000 |
| Service / bookkeeping / tutoring | $50,000–$150,000 |
| Retail storefront | $150,000–$400,000 |
| Quick-service food (counter) | $200,000–$600,000 |
| Large food / drive-thru | $1,000,000–$4,500,000+ |
Indicative ranges only. The right figure depends on brand, format, lease and location — always confirm against the franchisor’s disclosure document.
Ongoing franchise fees
Once you’re trading, most franchisors take a cut of gross sales:
- Royalty fee — typically 4–12% of gross sales. Paid for the brand and system.
- Marketing levy — typically 2–6% of gross sales. Funds national and local advertising.
These come off the top of revenue, before rent, wages and stock. A store paying a combined 12% on $1 million of annual sales hands over $120,000 a year before it pays a single wage — which is exactly why the ongoing cost you can control matters so much.
The cost most budgets underestimate: labour
For any franchise with staff, labour is usually the single biggest ongoing cost — often 20–35% of revenue in hospitality and retail. Yet most “cost to open a franchise” guides mention it in a single line, if at all. That’s a mistake, because unlike the franchise fee (fixed) or royalties (fixed), labour is the cost you can actually influence week to week.
Staff are covered by a modern award — the Fast Food Industry Award for quick-service brands, the Restaurant or General Retail Award for others. What pushes the labour percentage up isn’t the base rate; it’s the 25% casual loading and the evening, weekend and public-holiday penalty rates that land on exactly the hours a franchise is busiest. Get the roster wrong and labour quietly eats the profit. Model your own numbers with the franchise labour cost calculator, and see reducing labour costs without understaffing for the levers.
How much does it cost to open a specific franchise?
Costs vary hugely by brand. We’ve broken down the full setup, ongoing fees and labour numbers for Australia’s biggest quick-service franchises:
How to budget for a franchise
Before you sign, budget for
-
The total upfront investment — not just the franchise fee, but fit-out, equipment, inventory and working capital
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At least 3 months of operating expenses in cash to cover the ramp-up before the store is profitable
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Ongoing royalties and marketing levy as a fixed percentage of every dollar of sales
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A realistic labour budget at your sector’s benchmark — model it with the franchise labour cost calculator
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Professional fees for legal and accounting review of the franchise agreement
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Whether you’re buying new or existing — an established store costs more upfront but comes with proven turnover
Once you’ve modelled the costs, the next question is whether the numbers actually work. See our guide to whether franchises are profitable in Australia, and — if staffing is your next step — how to staff a new franchise.
Know your labour cost before you sign the lease. RosterElf shows live wage cost against sales as you build each roster, with award rates applied automatically — so a new franchise hits its target labour percentage from day one. Start with the free franchise labour cost calculator to benchmark your model.
Related RosterElf resources
Franchise labour cost calculator
Franchise workforce management
Award rates guides
Are franchises profitable?
How to staff a franchise
Rostering software
Disclaimer
Cost figures in this article are indicative, were last verified in July 2026, and vary widely by brand, format, lease and location. This is general information, not financial or franchising advice. Always verify current figures against the franchisor’s disclosure document and seek professional advice before committing.
Frequently asked questions
How much does it cost to open a franchise in Australia?
It ranges from around $20,000 for a mobile or home-based franchise to over $1 million for a large food franchise. Most storefront franchises cost $150,000–$600,000 to open, covering the franchise fee, fit-out, equipment, inventory and working capital. Always confirm the specific figure in the franchisor’s disclosure document.
What is the cheapest franchise to start in Australia?
Mobile and home-based franchises — lawn care, cleaning, tutoring, bookkeeping — are the cheapest, often $20,000–$60,000 to start, because they avoid an expensive shopfront lease and fit-out. They also typically need fewer staff, which keeps ongoing labour costs low.
What are ongoing franchise fees?
Most franchisors charge an ongoing royalty of 4–12% of gross sales plus a marketing levy of 2–6%. These are deducted before rent, wages and stock. On top of those, labour is usually the biggest ongoing cost.
How much working capital do I need to open a franchise?
Budget at least three months of operating expenses in cash — commonly $30,000–$150,000 depending on the size of the business — to cover wages, rent and bills while the store ramps up to profitability.
Why is labour cost so important when opening a franchise?
Because it’s usually the single biggest ongoing expense and the one you can actually control. Franchise fees and royalties are fixed, but labour depends on how you roster — and getting it wrong through over-rostering or too many penalty-rate hours can wipe out the profit. See reducing labour costs without understaffing.
