Know Everything About Franchise Fees Why and Whom To Pay

1. Know Everything About Franchise Fees Why and Whom To Pay The franchise business is quite unique in every sphere. The money flow here is different from any other mode of sole proprietor business. There are many myths and confusion regarding franchise fees. They think that they Cant Pay Franchisor the share of the amount they have earned by their efforts. Here we will discuss, clear, and resolve all the queries regarding the franchise fees so that more and more people can take their call and make an informed decision. Let’s Start with Franchise Fees! To gain the license of the franchise business, the franchise fees are the golden key. It will unlock the opportunity to use the brand name, business model, resources, and marketing for a certain location. In return for the money, you will get the complete setup. The franchisor has made the effort to establish the brand and you have to pay to get the advantage to earn your share of profit. Are Franchise Fees Enough to Start the Business? Franchisee fees are not the complete upfront cost to set up the business. It is actually a part of the total cost. You have to arrange finance to establish the business like rent of the real estate, recruitment, and resources otherwise you ​Can’t Pay Franchisor​ the franchisee fees in time. What are the other Franchise Fees? Apart from the initial franchise fees, there are royalties and marketing fees for the business. The brand is the main capital here for which the franchisors are ready to spend thousands of dollars every year on its marketing. It is the responsibility of the franchisees to take the share of the brand marketing investment. That’s why, depending on the monthly revenue, the marketing fees are calculated. However, before investing the amount you can always ask the franchisor about the marketing plan and evaluate yourself how much potential it has for your location and target customers. Apart from marketing fees, there is royalty for the franchise. It is a fixed or variable amount that is collected monthly by the franchisor. Generally, it is a percentage of the revenue they have earned for the month. It is quite higher than the marketing fees.

2. Depending on the nature of the business, the percentage of royalty can be between 4% to 12% of the revenue. While franchise fees are the one-time investment for the franchisees, the royalty and marketing fees are the monthly recurring expenses for them. http://interarticles.com/article/74900-know-everything-about-franchise-fees-why-and-whom-to-p ay/