Knowledge Base

How much are franchise royalty payments?

Costs
Written by
Sam Stawarz
Published on
June 12, 2023

Introduction
A franchisor is the company that owns the rights to a brand, such as McDonald's or Applebee's. When a franchisee buys into that brand, he or she agrees to pay royalties back to the franchisor based on certain factors. These include revenue generated by their location and sales of certain products from the parent company.

The exact percentage of these payments will vary by industry, but it's often between 6% and 10%. Here are some examples of how royalty payments work for various kinds of businesses:

Franchise royalty payments are a percentage of revenue paid to a franchisor, or parent company.

Franchise royalty payments are a percentage of revenue paid to a franchisor, or parent company. A franchisee pays royalties on all sales made within their store.

This amount may vary depending on the type of business and its location. However, it's important to note that all franchises have different requirements for royalty payments-some might only require an upfront payment when opening up shop while others will require monthly fees throughout the duration of your contract with them

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