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.
Why does a franchisee have to pay an ongoing royalty fee?
Payment of a royalty fee is something that a franchisee often has difficulty coming to terms with, as on a day-to-day basis it is difficult to see the ongoing benefit when compared to payment of the initial fee, which includes, amongst other things, initial training. The royalty fee is an ongoing fee that is usually paid by a franchisee during the whole length of a franchise agreement in return for use of the franchisor’s trademark, systems and goodwill. Royalty payments received by the franchisor may also be used to offset expenses such as developing the franchise network, new products, services and technologies. Royalty fees are usually calculated as a percentage of gross sales of the franchisee’s business and are payable monthly, based on the previous months’ gross sales. Whilst a franchisee can ask for a breakdown of what it gets in exchange for payment of the royalty fee and how it is allocated, a franchisor is not usually required to justify where and how the royalty payments are allocated.
You might also be interested in
Will a franchisor tailor its initial training to me or will it only provide set instruction that covers all aspects of the business?
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
Companies to Consider
Jackson Fire & Security
Business Sales Plus
Profit of £50,000 and increasing thereafter
Ask for more information
Up to £230,000
£120,000 net profit
£14,000 per week
Multi-unit opportunities available
Get expert franchising news delivered straight to your inbox
Franchise news, advice and new opportunities delivered weekly.
Must Read Articles
Added one year ago | 2 min read
Added 23 hours ago | 2 min read
Added about 2 days ago | 2 min read
Find your next business opportunity
Search 100s of UK franchises and become your own boss today.
What Franchise Newsletter
Keep up to date with all the industry news