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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?

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What is a Franchise Fee?

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