Franchise Fee Structure

A franchise fee structure refers to the various costs that a franchisee pays to operate under a franchisor's brand. Typically, this includes an initial franchise fee—paid upfront to join the franchise—and ongoing royalties, which are a percentage of sales paid regularly (often monthly). Additional costs may include marketing fees, training expenses, and contributions to a national advertising fund. Understanding this structure is crucial for potential franchisees, as it affects profitability and business operations. Overall, it reflects the financial arrangement between the franchisor and franchisee in exchange for access to the brand and support.