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
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
Answered by Vincent Anthony
Vincent Anthony writes: The property market has wide appeal because it is relevant to everyone: we all... read more
Answered by Louise Harris
Louise Harris writes: Richness or wealth is relative. We always want more, I guess. So, what is... read more
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
Exciting Franchise Opportunities
Start your own Woods Russell franchise
Yes
Find Out More£100,000
Request Free Information
Send a free enquiry to Woods Russell for further information!
Start your own Amigos Burgers and Shakes franchise
Yes
Find Out More£480,000 - £1m (from 14% profit)
Request Free Information
Send a free enquiry to Amigos Burgers and Shakes for further information!
Start your own Wok to Walk franchise
Yes
Find Out MoreN/A
Request Free Information
Send a free enquiry to Wok to Walk for further information!
Start your own Black Rooster Peri Peri franchise
Yes
Find Out MoreROI within 18 months with an average net...
Request Free Information
Send a free enquiry to Black Rooster Peri Peri for further information!
Start your own The Urban Chocolatier franchise
Yes
Find Out More£872,000
Request Free Information
Send a free enquiry to The Urban Chocolatier 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
-
50 franchises with funding plans in 2024
Added 2 weeks ago | 2 min read
-
Fat Phill’s set to make its British debut
Added one day ago | 2 min read
-
How to get funding for your franchise business
Added 5 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 -
Under 50k
If you have experience and more to invest
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