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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?

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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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What is a Franchise Royalty Fee?

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