The franchise business will contact you by means of email and/ or telephone only to the email address and phone number you have provided.
By submitting the enquiry form you are consenting to send your personal information to the selected franchise business.
You also agree to receive further newsletter email marketing from What Franchise.
Close
Are a franchisor’s management service fees always charged as a percentage of gross sales?
It is common for management service fees to be charged as a percentage of turnover. The actual percentage will depend on the nature of the particular franchise, although in many cases the percentage will often be somewhere between 4-10 per cent, with the frequency of payments varying from weekly, monthly, quarterly or, very rarely, annually.In some cases, a franchisor may ask for a guaranteed management service fee, meaning that a franchisee will have to pay the higher of an amount detailed in the franchise agreement and an amount calculated using the relevant percentage of turnover. For example, the greater of £1,000 per month or six per cent of turnover for that month. The franchisee should also consider whether the management service fee includes any other fees that may be payable to the franchisor, such as a contribution towards marketing. The important issue for the franchisee will be whether he or she is happy that the management service fee will not reduce profitability, when taken into consideration with other costs that may be payable in relation to the franchise business, to an extent that the franchise business is an unworkable proposition.
You might also be interested in

Answered by Shelley Nadler
Shelley Nadler writes: A concern that businesses may have when deciding to franchise their business, is the... read more

Answered by Alan Wilkinson
Alan Wilkinson writes: There are two elements to consider here. First is the franchise fee itself, and... read more

Answered by John Pratt
John Pratt writes: It is simply not possible to refer to taking a franchise as an “investment”,... read more

Answered by Louise Harris
Louise Harris writes: It’s quite a lot like choosing a life partner. You need to be interested... read more
Exciting Franchise Opportunities

Start your own DiscreteHeat franchise
Yes
Find Out More£125,000

Request Free Information
Send a free enquiry to DiscreteHeat for further information!

Start your own Laser Clinics United Kingdom franchise
Yes
Find Out MoreN/A

Request Free Information
Send a free enquiry to Laser Clinics United Kingdom for further information!

Start your own TaxAssist Accountants franchise
Yes
Find Out MoreN/A

Request Free Information
Send a free enquiry to TaxAssist Accountants for further information!

Start your own GoliathTech franchise
Yes
Find Out MoreN/A

Request Free Information
Send a free enquiry to GoliathTech for further information!
_75_75_s.jpg)
Start your own Master Kebabs franchise
Yes
Find Out More£1.2m annual turnover
_75_75.jpg)
Request Free Information
Send a free enquiry to Master Kebabs for further information!
Companies to Consider

Get expert franchising news delivered straight to your inbox
Franchise news, advice and new opportunities delivered weekly.
Must Read Articles
-
Brexit property investment myths BUSTED!
Added 3 years ago | 2 min read
-
6 legal tips for franchisees
Added about 2 days ago | 2 min read
-
Why exceptional training is a vital element of franchise success
Added 3 days ago | 2 min read
Franchises by Minimum Investment
Find your next business opportunity
Search 100s of UK franchises and become your own boss today.
-
Under 10k
Starting a franchise doesn't have to be costly
Click here -
Under 20k
A mid-range investment for the more experienced
Click here -
Over 50k
If budget is not an issue, then don't miss these.
Click here -
Local Franchises
Find the perfect franchise in a location to suit you
Click here
What Franchise Newsletter
Keep up to date with all the industry news