MANAGEMENT

Detailed explanation-1: -It’s a royalty. Franchise royalties are usually collected by your franchisor on a monthly basis. Like marketing fees, these fees are based on a percentage of your revenue.

Detailed explanation-2: -A franchisee will have to pay a number of fees to the franchisor throughout the term of the franchise agreement. These payments are sometimes generically referred to as ‘royalties’ and can include periodic ongoing fees and advertising fees.

Detailed explanation-3: -Royalty Fee A royalty fee is an ongoing fee that the franchisee pays to the franchisor. The franchisor uses the royalty fees to support its existing franchisees and maintain and grow the franchise system.

Detailed explanation-4: -6 By definition, franchises have ongoing fees that must be paid to the franchisor in the form of a percentage of sales or revenue. This percentage can range between 4.6% and 12.5%, depending on the industry.

Detailed explanation-5: -Royalty payments are the franchisor’s source of revenue. Because royalty payments are recurrent, they act as franchisee maintenance expenses. What do they keep? For starters, it covers the franchisor’s fees, but most of the earnings are reinvested to promote the company.