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When you open a franchise, you pay a franchise fee. This is an upfront cost that will give you access to a franchisor’s business model. According to the <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-royalty-fee-2718389" target="_blank" rel="nofollow">Small Business Administration</a>, a franchise fee is a license to own and operate a franchise business.Franchisors charge a franchise fee that typically ranges from $20,000 to $50,000, but in some cases can run as high as $100,000.&nbsp;There are also “other” franchise fees that include marketing fees and royalties.The Small Business Administration stated that franchise royalties are collected by the franchisor on a monthly basis, and are based on a percentage of revenue. Franchise royalties range from 4% up to 12% or more. The actual percentage depends on the type of franchise you are opening.According to the Small Business Administration, a food franchise often has a lower franchise royalty fee than other types of franchises due to the high volume of revenue.Related articles:&nbsp;<ul><li><a href="https://1851franchise.com/what-is-a-franchise-fee-2717221#frannews">What Is a Franchise Fee?</a></li><li><a href="https://1851franchise.com/what-are-franchise-registration-states-2717171#frannews">What Are “Franchise Registration States”?</a></li></ul>

What is a Franchise Royalty Fee?

1851 Franchise

There are several fees associated with opening a franchise, and they can be confusing. A franchise royalty fee is a monthly fee based on revenue and is paid in addition to the upfront franchise fee. 

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Filta Environmental Kitchen Solutions

Filta Franchisee Feature - Leo Tartaglia - 1851 Franchise

Doubling Down on Dedication: Why Leo Tartaglia Reaffirmed His Commitment to Filta After a Decade

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Melting Pot

Melting Pot team holding $1.2 million check addressed to St. Jude Children's Research Hospital

Melting Pot’s Million-Dollar Mission: A 20-Year Partnership With St. Jude That’s Changing Lives

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Paris Baguette Canada

Paris Baguette CDO Nick Scaccio Talks Franchise Growth, Training and Innovation 

Paris Baguette CDO Nick Scaccio Talks Franchise Growth, Training and Innovation on the Late Night Restaurant Show Podcast

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Comfort Keepers

Comfort Keepers - Butch and Niki Irwin - Father's Day - 1851 Franchise

A Legacy of Love: A Father-Daughter Journey To Bring Comfort Home

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Minuteman Press International

Minuteman Press Franchise Owner Corey Sanders at his center in Greenville, SC.

Minuteman Press Franchise Review: From Business Consulting to Printing

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Dave’s Hot Chicken Sold to Roark Capital in $1 Billion Deal to Fuel Global Expansion

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Homebuyers Keep Buying — And That’s Good News for Home Service Franchises - 1851 Franchise

Homebuyers Keep Buying — And That’s Good News for Home Service Franchises

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AI Could Push Unemployment to 20% — Fueling a Surge in First-Time Franchise Buyers - 1851 Franchise

AI Could Push Unemployment to 20% — Fueling a Surge in First-Time Franchise Buyers

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How To Sell Just One Franchise: What You’ll Learn at FranCamp NJ 2025

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House Passes Tax Relief Package With Key Benefits for Small Businesses and Franchises

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McDonald’s To Hire 375,000 Workers as It Prepares for Major U.S. Expansion

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Ellie Mental Health Franchisee Backlash - Alleged Misrepresentations - 1851 Franchise

Ellie Mental Health Faces Franchisee Backlash Over Alleged Misrepresentations

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How Car Sales Taught Buddy's Home Furnishings’ Mitchell Lee the Secrets of Franchise Development

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

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Sola Salons Franchisee Grows Salon Freedom Into a Multi-State Powerhouse 

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What You Need To Know About Low-Cost Franchise Opportunities

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Delivering Fun With a Smile: How Busy Bee Jumpers Earns 5-Star Raves From Families Across New England

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Dan Yangas Brings Family Flooring Legacy Full Circle With Footprints Floors Franchise in Naperville 

Dan Yangas Brings Family Flooring Legacy Full Circle With Footprints Floors Franchise in Naperville, Illinois

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What is a Franchise Royalty Fee?

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