1851

A franchise fee is a certain amount of money that is paid to a franchisor by an incoming franchisee in exchange for the right to replicate the business model and concept. Under the Federal Trade Commission, which <a href="https://www.ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings/franchise-rule?utm_source=1851franchise.com&utm_medium=article&utm_campaign=what-is-a-franchise-fee-2717526" target="_blank" rel="nofollow">defines franchising</a> throughout the United States, a business can only be considered a franchise if the franchisee makes a payment to the franchisor of at least $500 (annually adjusted) either before or within six months of opening the business.As opposed to <a href="https://1851franchise.com/how-to-structure-franchise-royalty-fees-2715569">ongoing royalty fees</a> or <a href="https://1851franchise.com/how-much-does-it-cost-to-open-a-franchise-2716258">overhead costs</a>, the franchise fee is, usually, a one-time payment, but can also be paid incrementally depending on the terms of the <a href="https://1851franchise.com/10-must-ask-questions-about-franchise-agreements-2708306">franchise agreement</a>.The cost of a concept’s franchise fee will be disclosed in the brand’s <a href="https://1851franchise.com/what-is-an-fdd-2705192">Franchise Disclosure Document</a>, and is often included as a supplemental fee in addition to the outlined startup costs. Franchise fees are generally in the range <a href="https://www.sba.gov/blog/franchise-fees-why-do-you-pay-them-how-much-are-they?utm_source=1851franchise.com&utm_medium=article&utm_campaign=what-is-a-franchise-fee-2717526" target="_blank" rel="nofollow">$20,000 to $50,000</a> depending on the brand.Related stories:<ul><li><a href="https://1851franchise.com/how-do-you-buy-a-franchise-2717146#stories">How Do You Buy a Franchise?</a></li><li><a href="https://1851franchise.com/how-much-capital-is-needed-to-buy-a-franchise-2716989">How Much Capital Is Needed to Buy a Franchise?</a></li><li><a href="https://1851franchise.com/can-you-get-rich-owning-franchises-2715618#stories">Can You Get Rich Owning Franchises?</a></li></ul>

Understanding Franchise Fees | 1851 Franchise

1851 Franchise

A franchise fee is a one-time payment that a franchisor collects from a franchisee for the right to use the company's brand, products and intellectual property.

What is a Franchise Fee?

what-is-a-franchise-fee

Children's Lighthouse

Children’s Lighthouse Ramps Up Growth in First Half of 2025 With Strategic Expansions, Franchise Signings, and New Headquarters

childrens-lighthouse-ramps-up-growth-in-first-half-of-2025-with-strategic-expansions-franchise-signings-and-new-headquarters

Right at Home

Right at Home® Named a 2025 Top Franchise Brand for Multi-Unit Owners by Entrepreneur Magazine

right-at-home-named-a-2025-top-franchise-brand-for-multi-unit-owners-by-entrepreneur-magazine

Dog Training Elite

Dog Training Elite -Tips-to-Ease-Dog Anxiety-for-4th of July- July-2025

Dog Training Elite Shares Tips To Ease Dog Anxiety for 4th of July

tips-to-ease-dog-anxiety-fireworks-4th-of-july

Melting Pot

Photo of interior of Melting Pot restaurant

Lexington Herald Leader: This Restaurant Chain Eyes a Return to Lexington After 10 Years

melting-pot-return-to-lexington

Keke's Breakfast Cafe

Keke's Breakfast Cafe - John and Kimberly Ehrhard - 1851 Franchise

Empowering Leadership, One Pancake at a Time: How John and Kimberly Ehrhard Are Building a Franchise Legacy with Keke’s Breakfast Cafe

john-kimberly-ehrhard-kekes-franchise

Buying a Franchise Masterclass

 Franchise Opportunities

Get Support Buying a Franchise

How to Buy a Franchise White Paper

How to Buy a Franchise

How to Sell Franchises

How to Grow a Franchise

Find a Franchise Supplier

1851 Franchise Opportunities

Franchisor News

Franchisor Power Rankings

FranCamp Mastermind Summit

Franchise Development Website Builder

Franchise Resources

What ALEC-Laffer's Report Means for Franchising

Website Awards

Power Rankings

About 1851

Advertise on 1851

Contact 1851 Editorial

Terms of Use

1851 Login

GROWTH CLUB LOGIN

facebook

instagram

twitter

linkedin

youtube

Drone Delivery Takes Flight in QSR: The Future of Franchise Operations?

drone-delivery-takes-flight-in-qsr-the-future-of-franchise-operations

Chick-fil-A Tops Customer Satisfaction Rankings for 11th Year as Challenger Brands Gain Ground

chick-fil-a-tops-customer-satisfaction-rankings-for-11th-year-as-challenger-brands-gain-ground

Technomic Releases Annual Ranking of the Top 15 Fast-Food Chains in the U.S.

technomic-releases-annual-ranking-of-the-top-15-fast-food-chains-in-the-us

Rising Jobless Claims Could Signal Challenges — and Opportunities — for Franchising

rising-jobless-claims-affect-franchising

Hardee’s Lawsuit Highlights the Risk of Going Off-Model in Franchising

hardees-franchise-lawsuit-paradigm-investment-group

Hooters Leans Into Franchising With Closure of 30 Company-Owned Stores - Agg - 1851 Franchise

Hooters Leans Into Franchising With Closure of 30 Company-Owned Stores

hooters-franchise-model-company-owned-closures

The Ultimate Guide to Selling Franchises: How To Create a Strong Incentive

how-to-build-strong-incentives-to-attract-prospective-franchisees

How Vishal Juneja Turned a Family Tradition Into a Paris Baguette Franchise

How Vishal Juneja Turned a Family Tradition Into a Paris Baguette Franchise Built on Heart and Community

What is a Franchise Fee?

MORE STORIES LIKE THIS