Have you been thinking about owning a Neighborly® franchise? Let's talk dollars. We'll give you a breakdown of our franchise fees, from initial startup costs and royalties to ongoing expenses, and explain what those costs cover. 

Neighborly Franchise Fees & Startup Costs Explained 

According to the U.S. Census Bureau, 11.4% of all businesses are franchises. Like any new business, investing in a Neighborly franchise comes with upfront and ongoing expenses. So, what are franchise fees and costs, and what do they cover? Let’s break it down. 

What Are Common Franchise Fees? 

When starting any franchise, you’ll often come across several types of fees, including: 

• An Initial Franchise Fee: A one-time payment granting you the rights to operate under the franchisor’s brand. 
• Royalty Fees: A percentage of revenue paid to the franchisor to cover ongoing support, training and operational resources. 
• Marketing Fees: Contributions to national and local marketing efforts that help promote the brand and drive customer traffic. 
• Equipment & Inventory Costs: Expenses for the tools, products, and supplies provided to run your business. 

Initial Franchise Fee vs. Ongoing Royalties 

Your initial franchise fee is normally a one-time investment that grants you access to the franchisor’s brand, its business model, and its support system. 

In contrast, royalty fees in franchising are ongoing payments that help fund continuous training (usually a percentage of your revenue), support, and brand development. We’ll explore these royalties in more detail later. 

What Does Your Initial Franchise Fee With Neighborly Cover? 

When you invest in a Neighborly franchise, you’re not just paying for a name, you’re investing in a proven business model with built-in support.  

Your initial franchise fees generally include: 

• Brand Licensing: The right to operate under the trusted Neighborly name, benefiting from national brand awareness.  
• Comprehensive Training: Hands-on and virtual training to prepare you for daily operations, marketing, and business management. 
• Ongoing Support: Access to industry experts, operational guidance, and a network of successful franchisees. 
• Marketing & Lead Generation Support: National and local marketing efforts to help you attract customers and grow your business.
  

How are Neighborly Franchise Fees and Royalty Payments Structured? 

While the initial franchise fee is typically due upfront, some costs, such as equipment and marketing fees, may have flexible payment options. Neighborly can provide guidance on financing options to help you manage your investment. 

How Much Do You Need to Invest to Start a Franchise Business with Neighborly? 

One of the most important questions when considering franchise ownership is, “How much do I need to start a franchise?” The investment required for a Neighborly franchise depends on several factors, including the brand and territory size you select. 

Initial Neighborly franchise costs vary significantly depending on the brand, industry, and territory, but the majority of franchises cost between $60,000 and $200,000 to get started, depending on the brand. Be sure to closely review the Franchise Disclosure Document provided to you to assess your estimated initial cost in detail. 

Liquid Capital vs. Total Investment 

When planning your Neighborly franchise startup costs, it's important to understand the difference between liquid capital and total investment: 

• Liquid Capital: The cash you need to cover costs before your business turns a profit. At Neighborly, the required amount varies by brand to ensure stability in the early stages. 
• Total Investment: The full financial commitment required to launch and run your franchise, including franchise fees, equipment, staffing, and working capital to cover expenses until the business generates consistent revenue.
  

Financing Options for Neighborly Franchise Owners 

Securing the necessary funds to start a franchise can be a challenge for many aspiring business owners. Unlike independent entrepreneurs and standalone business owners, franchise owners have the benefit of backing and support from a proven, national brand from day one. 

Here are some of the most common ways to finance a Neighborly franchise: 

Franchisor Financing Programs 

Some franchise brands, including Neighborly, offer in-house financing options or partnerships with third-party lenders to help franchise owners cover franchise fees and startup costs. Other financing options include: 

• Small Business Loans (SBA Loans) 
• 401(k) Business Financing (ROBS – Rollovers as Business Startups) 
• Bank Loans & Alternative Lenders 
• Traditional business loans, lines of credit, or personal loans from banks and credit unions can also be used to fund a franchise.  
• Veteran Franchise Initiative: Since 1991, VetFran has helped veterans start franchises with guidance, resources, and financing support. 

Learn more about our financing options in the clip below:  

The Ongoing Costs of Owning a Neighborly Franchise 

Investing in a Neighborly franchise requires an ongoing financial commitment to maintain and grow your business.  

Royalty Fees & Advertising Fund Contributions 

One of the most common questions new franchise owners ask is, "What are royalty fees in franchising, and how are they paid?" 

• Royalty Fees: These fees are paid on a regular basis (typically monthly) and are usually a percentage of revenue. They help cover ongoing franchisor support, training, and brand development. 
• Advertising Fund Contributions: Franchise owners contribute to a national marketing fund, which helps fund brand awareness campaigns, advertising, and promotional strategies that benefit the entire franchise network. 

Maintenance & Operational Expenses 

Beyond franchise-specific fees, you'll also need to budget for day-to-day operational costs, which may include: 

• Employee salaries 
• Equipment maintenance & upgrades 
• Business Insurance 
• Technology and software tools for business operations
   

The Franchise Disclosure Document (FDD) 

Above all else, the Franchise Disclosure Document (FDD) regarding the specific brand you are interested in will inform you on the specific fees, costs, and options available to you as you navigate owning a Neighborly franchise. Be sure to review it closely to understand the cost outlook in detail. 

Making the Smart Franchise Investment 

Now that you're more familiar with Neighborly franchise fees, startup expenses, and ongoing costs, we invite you to explore our franchise opportunities and select the one that matches your skills, long-term goals, and budget. 

If you still have questions and want to learn more, book a quick call with our team of friendly associates to get clear, honest answers about Neighborly franchise ownership.  

Watch our Financing 101 panel discussion to hear from franchising finance experts from three top firms on what options are available to you to fund your franchise ownership dreams.