What Fees Are Charged For A Franchise?
When it comes to franchising fees, it is important the business remains viable for the franchisee. The upfront fees shouldn’t be such a heavy burden that it becomes difficult to keep the business running.
- Development fee – An upfront fee for granting territorial exclusivity to the franchisee or the right to operate the franchise.
- Store Opening Fee – An upfront fee payable on opening each franchised outlet.
- Service Fee or Royalty – A percentage of gross turnover, usually payable monthly over the term of the relationship.
- Marketing contribution – Usually expressed as a percentage of gross turnover, this is a contribution to local, regional or international marketing campaigns the franchisor will develop and run on behalf of the network.