FDD Item 7: what it costs to open

The official name of Item 7 is Estimated Initial Investment. Under the federal franchise rule, it has to be shown as a table headed YOUR ESTIMATED INITIAL INVESTMENT. Every row covers one category of spending, and the final row adds them all together.

The table opens with the upfront fee, plus training and real property, meaning whatever land or building you buy or lease. Initial fees mean the full amount paid to the franchisor before opening day, not only the single fee carrying that label.

After that you'll find equipment and build-out costs. Build-out means getting the premises ready, things like walls, flooring, counters and signage. The table also includes opening inventory, deposits and licenses, which covers the goods on your shelves and the permits required to operate.

One line covers additional funds, cash you hold back to settle bills while the business finds its feet. The rule says this cash must cover at least your first 3 months, so the total includes what it takes to keep going after opening day, not just what it takes to open.

Where a franchisor can't pin down a precise figure, Item 7 shows a low-high range. The low and high figures are estimates, not a promise of what you'll spend, and comparing them with what other franchisees paid can help you assess them.

Alongside every cost, Item 7 spells out how you pay, when payment is due and who receives the money. That lets you tell which payments belong to the franchisor and which are owed to landlords, builders or suppliers, plus how quickly each has to be made.

These totals come from each brand's 2026 disclosure document filed on the Minnesota Department of Commerce registry. Each total already builds in the extra funds for the opening 3 months or more.

Some of these gaps are enormous. Chick-fil-A's estimates span a particularly wide range, so looking at the individual costs may be more helpful than comparing totals alone.

You'll find the franchise fee on its own in Item 5, and it makes up just one slice of the Item 7 total. Take Burger King: its fee is $50,000, yet the Item 7 total begins at $2,039,200. Great Clips sets its fee at $20,000, against a total running from $187,800 to $419,900. For more on the fee and the continuing royalty, see franchise fee vs royalty.

This is an estimate from the franchisor, not an invoice. The Federal Trade Commission recommends checking the Item 7 figures against what other franchisees actually paid to open. Item 20 of the same document covers the brand's outlets, and the Item 20 guide shows how to make sense of that list.

All the numbers on this site are drawn from each brand's latest disclosure document on the Minnesota registry. If you'd like to line up two or three brands side by side, try the cost comparison page. And to understand how these costs relate to earnings, the Item 19 guide explains what franchisees report selling.