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Understanding the Financial Side of Franchising: What You Need to Know

The Franchise Consulting Company

Common Ongoing Fees: Royalty Fees: The royalty fee is an ongoing payment that franchisees make to the franchisor. Typically based on a percentage of your monthly or annual revenue, this fee compensates the franchisor for using their brand, intellectual property, systems, and ongoing support.

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The Complete Guide to Franchises

AllBusiness.com

Royalty Fees: Most franchisors charge either monthly royalties as a percentage of gross sales, typically between 4% and 8%, or a set monthly fee. These fees fund continued access to systems, support, and brand resources. The SBA Franchise Directory lists eligible brands.

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What Veterans (and other potential business owners) REALLY Want to Know Prior to Purchasing a Business

Franchise Journal

They ask about upfront costs, but also about financing options like SBA loans or leveraging their 401k. They express concerns about ongoing costs – royalty fees, inventory, and simply managing cash flow in the early stages. I clarify that we're discussing buying the franchise itself.

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5 Questions to Ask Before Diving Into Franchise Ownership

AllBusiness.com

In addition, with most franchises, there will be ongoing royalty fees, which usually are a percentage of revenue, to pay after the franchise is open. When you research the initial investment requirements, ask if there are franchise fee discounts. Some franchisors offer incentives for women, veterans , and minorities.

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The Top Mistakes First-Time Franchisees Make and How to Avoid Them

The Franchise Consulting Company

Factor in Ongoing Costs: In addition to the initial investment, be sure to account for ongoing costs like royalty fees, marketing contributions, and employee wages. These fees can add up quickly and impact your profitability. Always ensure that you have enough cash flow to cover these recurring expenses.

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Top Laundromat Franchise Opportunities for Entrepreneurs in 2025: Keep More of Your Money with This Franchise Tax Hack

The Franchise Insiders

Initial Investment : Consider the initial investment required to purchase the franchise, including franchise fees, equipment costs, and working capital. Ongoing Fees : Understand the ongoing fees associated with the franchise, such as royalty fees, marketing fees, and technology fees.

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Ro Khanna: A Progressive Voice in American Politics

Franchise Journal

They ask about upfront costs, but also about financing options like SBA loans or leveraging their 401k. They express concerns about ongoing costs – royalty fees, inventory, and simply managing cash flow in the early stages. I clarify that were discussing buying the franchise itself.