Franchise Glossary
Pre-Opening Costs
What is Pre-Opening Costs in franchising?
Expenses incurred before the franchise opens for business: training travel and lodging, initial marketing and grand opening spending, pre-opening wages for hired staff, deposits, and professional fees. Pre-opening costs are itemized in FDD Item 7 and should be funded from the initial investment, not from operating cash flow. Underestimating pre-opening costs is one of the most common ways new franchisees arrive at opening day with less runway than they planned.