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
What is a franchisor’s main source of earnings?
Franchisors obtain income from a number of sources: • Initial fees paid by franchisees. • Continuing fees, normally referred to as ‘management service fees’ and calculated as a percentage of a franchisee’s turnover - the average MSF in the UK is approximately eight per cent. • Advertising levies payable by franchisees - normally approximately two per cent - to enable the brand to be marketed and promoted. • Mark-up on goods or services. Not all franchisors receive income from all of these sources, but all franchisors receive income from, at least, some of these sources. The crucial point about all franchisors’ sources of income is that there must be transparency, so that the franchisee is aware that the franchisor is obtaining an income stream. While the above sets out sources of income for the franchisor, not all of these sources should be a source of profit. The initial fee, for instance, should generally not contain a profit element for the franchisor. Its purpose is simply to reimburse the franchisor the very considerable initial costs incurred in recruiting a franchisee. Likewise, the marketing levy should only be spent on marketing activities and should not contain any profit element for the franchisor, although it is quite proper for a franchisor to recharge its internal marketing costs to the marketing fund.
You might also be interested in

Answered by Alan Wilkinson
Alan Wilkinson writes: When a franchisor recruits franchisees, it will have a set profile of the type... read more

Answered by John Pratt
John Pratt writes: There may be none if you’re not suited to dealing with businesses. Many people like... read more

Answered by Louise Harris
Louise Harris writes: Not all franchises are based on territories. Some may be split into business sectors,... read more

Answered by Renata Selley
Renata Selley writes: Your ‘year-end’ is the date when your franchise accounting period ends. Communication is king... read more
Exciting Franchise Opportunities

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 Expense Reduction Analysts (ERA) franchise
Yes
Find Out MoreN/A

Request Free Information
Send a free enquiry to Expense Reduction Analysts (ERA) for further information!

Start your own Glasstech franchise
Yes
Find Out More£55,000

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

Start your own The Best Magic Mirrors Franchise franchise
Yes
Find Out More£80,000

Request Free Information
Send a free enquiry to The Best Magic Mirrors Franchise for further information!

Start your own Wok&Go franchise
Yes
Find Out More£550,000

Request Free Information
Send a free enquiry to Wok&Go 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 one year ago | 2 min read
-
Top IT can help you keep your cutting edge
Added 15 hours ago | 2 min read
-
Revealed: the three characteristics of wealthy franchisees
Added one day 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