When starting a franchise business it’s important to understand the potential fees that you could be paying or people could be paying you.
on average the royalty percentage for a franchise is anywhere from about 3% up to 9% of volume.
you can determine what this is based off from in your contract.
however in some cases the fee can range from a small fraction of 1% up to even 50% or more of revenue, depending on the business. - Forbes
How is the franchise fee calculated, and what is it used for?
most common fees could be paid either weekly or monthly and it’s usually a percentage of gross sales.
this fee the franchisor can use to maintain and grow the current franchise branches.
The franchise fee for McDonald’s is $45,000. However in order to open a McDonald’s you will need a total rip investment of $1-$2 million dollars.
Opening a subway franchise will cost you the $15,000 franchise fee plus any start up costs.
To open a Chick-fil-A franchise, all you’ll have to pay is the $10,000 franchise fee.