So, you're considering buying a franchise—but before diving in, you're likely wondering: How much does it actually cost? It's a crucial question, and understanding the financial commitment upfront can set you on the path to success.
Let's explore the typical costs associated with buying a franchise, factors that influence these costs, and how Rainbow Snow offers an accessible entry point into franchise ownership.
Purchasing a franchise involves several key financial components:
Initial Franchise Fee: This is a one-time payment granting you the rights to operate under the franchisor's brand and system. Fees can range from $10,000 to over $50,000, depending on the brand and industry.
Startup Costs: These encompass expenses like equipment, inventory, signage, and initial marketing. For traditional brick-and-mortar franchises, startup costs can soar into the hundreds of thousands. In contrast, mobile or home-based franchises often require significantly less capital.
When evaluating the cost of buying a franchise, it’s easy to focus on the big, upfront numbers—like the franchise fee and equipment. But some of the most impactful costs are the ones that show up after you’ve opened your doors.
Here are the most common “hidden” or ongoing fees that can catch new franchisees off guard:
Most franchises charge royalty fees on a weekly or monthly basis—typically 4% to 10% of your gross revenue. These payments go toward continued access to the franchisor’s brand, operating system, and support network.
👉 Why it matters: Even if your business isn’t yet profitable, you’re still expected to pay royalties based on your sales. That’s why it’s critical to factor these into your monthly budget. At Rainbow Snow, we offer one of the lowest royalty rates in the industry, and we’ve even introduced a temporary royalty reduction for early operators to help you ramp up without pressure.
Many franchisors require you to contribute to a brand fund—usually 1% to 4% of sales. These funds are pooled to support national advertising campaigns or digital marketing efforts. Ask whether you’ll have visibility into how those dollars are spent.
Some franchise systems charge additional monthly fees for proprietary software, point-of-sale (POS) systems, or mobile ordering tools. These can add hundreds of dollars each month depending on the platform.
If you ever decide to renew your franchise agreement or transfer ownership to someone else, expect to pay additional administrative fees, which can range from $5,000 to $25,000+. It’s important to read the fine print upfront.
To avoid surprises, we always recommend working with a trusted funding advisor or franchise consultant. Our partner, Guidant Financial, specializes in helping new franchisees understand the full cost picture and find the right financial strategy—whether it’s through an SBA loan, 401(k) rollover, or other funding path.
Not all franchises are created equal—and neither are their price tags. While some models come with high upfront requirements, others are designed to be lean, flexible, and more accessible for first-time owners. Understanding the elements that influence startup costs can help you choose the opportunity that aligns with your goals and budget.
Here are the four biggest cost drivers to consider:
A full-service restaurant franchise, for example, typically requires extensive capital to build out a commercial space, purchase kitchen equipment, secure licenses, and hire a full team—before even opening the doors. That can easily push your investment into the six- or seven-figure range. By contrast, a mobile concept like Rainbow Snow eliminates many of those expenses. With no brick-and-mortar location, no complicated food prep, and a simplified menu, your startup costs stay focused and manageable, without sacrificing the customer experience.
Franchises that rely on fixed storefronts in high-traffic areas often come with long-term leases, monthly rent, and build-out obligations. These commitments add significant cost and complexity. On the other hand, mobile franchises like Rainbow Snow offer greater flexibility. You can operate seasonally or year-round, set your own schedule, and serve your community at events, parks, schools, or wherever foot traffic is strong. This mobility dramatically lowers overhead and allows you to grow organically.
Businesses that require specialized or high-tech machinery can add tens of thousands to your upfront costs, while concepts that focus on a simple product set—like shaved ice—require less equipment and reduce the risk of inventory waste. Rainbow Snow provides a turnkey trailer, known as The Arco, that comes fully equipped and ready to operate, so you don’t have to source, install, or configure complicated systems on your own.
While some franchises charge more upfront for a robust onboarding experience, that investment can pay off quickly. Franchisors who offer detailed operational guidance, in-person training, marketing playbooks, and real-time support give you the tools to hit the ground running. At Rainbow Snow, our new franchisees receive comprehensive training, startup support, and ongoing mentorship—because your success is our success.
Securing funding is a common concern for prospective franchisees. Several financing options are available:
Small Business Administration (SBA) Loans: Government-backed loans offering favorable terms for small business owners.
401(k) Rollovers: Utilize retirement funds without early withdrawal penalties through a Rollover for Business Startups (ROBS) arrangement.
Home Equity Loans: Leverage the equity in your home to finance your business venture.
Personal Savings or Equipment Loans: Traditional methods of funding, depending on your financial situation.
For a deeper dive into financing options, check out our Franchise Funding Guide today!
If you’re looking for a franchise with a strong earning potential, Rainbow Snow is a smart choice. As a mobile shaved ice business, it offers flexibility, low overhead costs, and multiple ways to generate revenue. Here’s what makes Rainbow Snow a lucrative investment:
Unlike many franchises that require expensive real estate and large upfront investments, Rainbow Snow offers a lower-cost entry point. With minimal overhead and a high-margin product, franchisees have a faster path to profitability.
Rainbow Snow thrives on local events, school fundraisers, and festivals—places where customers are excited to support a fun and familiar brand. This makes marketing easier and keeps customers coming back for more.
Franchisees can run their business seasonally or year-round, depending on their goals. Whether you want a side hustle or a full-time business, Rainbow Snow offers the flexibility to build your income on your terms.
Owning a franchise is one of the most accessible paths to entrepreneurship, offering financial predictability. With Rainbow Snow, you can start your own business with a lower investment and high growth potential. If you’re ready to take control of your future and bring smiles to your community, we’re here to help.
Want to learn more?
Book a call with us and take the first step toward owning your own Rainbow Snow mobile shaved ice business today.