It is common for there to be confusion between out of pocket cost vs total investment cost for a franchise.
Start costs are considered out of pocket costs, or the amount of money you will need upfront to get started with a franchise. This amount can vary in relationship to your personal budget needs, amount financed, and equipment needs.
Total investment cost includes money out of pocket and loans to finance your initial franchise investment. Your total investment differs from start-up costs, which are required for you to launch your business.
A comparison can be made between buying a home and starting a business. An initial down payment on the home (start cost) will get you moved in, and the mortgage (total investment cost) are required to continue living there.
Initial Franchise Fee
Acquisition and Establishment of Time Payment Reserve
Time Payment Line of Credit
Mobile Store Lease
Computer Software and Internet Service - 3 months' payments
Insurance - 3 months' premiums
Travel, Lodging and Meals (for training)
Professional Services (accountant, legal help for you)
Fixtures, Supplies, Licenses
Additional Funds - 3 months' living expenses (reserve)
Matco cannot give any specific numbers because of the variables and the franchise disclosure laws don't allow us to give any specific income numbers.
*Cost per Matco Tools 2023 FDD issued March 6, 2023.
Matco, backed by one of the largest companies in the country, handles all franchise investment financing in our office.
If you qualify, Matco can finance:
• Up to $84,000 of the initial inventory
• Time Payment Reserve (all or part)
• $30,000 to cover other startup expenses
Each situation varies based on your finances, however, the investment needed for a new franchisee can be relatively low compared to other franchise opportunities.
We’ll start you with an initial inventory of the tools most likely to be purchased by your customers. Almost all distributors finance their initial inventory, which in 2022 ranges between $50,000 and $84,000.
Upwards of 70% of a distributor’s customers pay "on time" (like a credit card account). You’ll need to fund this account so that you can begin offering time-based payments to customers immediately.
This is generally a much smaller figure, as you’ll need to pay for three months of the lease and insurance.
This includes a computer, software, and items like business cards and office supplies.