{"id":1315,"date":"2015-11-23T23:02:40","date_gmt":"2015-11-23T23:02:40","guid":{"rendered":"http:\/\/www.thefranchisemaker.com\/learningcenter\/?p=1315"},"modified":"2025-01-09T19:34:11","modified_gmt":"2025-01-09T19:34:11","slug":"how-the-franchise-fee-is-determined","status":"publish","type":"post","link":"https:\/\/www.thefranchisemaker.com\/learningcenter\/how-the-franchise-fee-is-determined\/","title":{"rendered":"How the Franchise Fee is Determined"},"content":{"rendered":"<p style=\"text-align: justify;\"><span style=\"color: #000000;\">No doubt one of the questions you have as you\u2019re looking to <a href=\"https:\/\/www.thefranchisemaker.com\/\">franchise your business<\/a> is, <em>\u201cHow is the franchise fee determined?\u201d<\/em> This is a great question simply because there is a misconception out there about how a franchise fee is determined. So let\u2019s answer this question by exploring what a franchise fee is really all about.<\/span><\/p>\n<h2 style=\"text-align: justify;\"><span style=\"color: #000000;\">Definition of a Franchise Fee<\/span><\/h2>\n<p style=\"text-align: justify;\"><span style=\"color: #000000;\">Let\u2019s first understand what a franchise fee is for and why you get it. The franchise fee is <em>different<\/em> than the total franchise investment (learn the <a href=\"https:\/\/www.thefranchisemaker.com\/learningcenter\/the-differences-between-franchise-fee-and-total-investment\/\">difference between franchise fee and total investment<\/a> and why they are different). The total franchise investment is how much someone will spend <em>in total<\/em> to start or open your business as a franchise. The franchise fee is part of this total franchise investment and is paid directly to you (see <a href=\"https:\/\/www.thefranchisemaker.com\/learningcenter\/how-the-cost-of-a-franchise-is-determined\/\">how the cost of a franchise is figured out)<\/a>. By definition the franchise fee is reimbursement to you for the deliverables you provide a franchisee when they join your system (this is a one-time payment). The key element in the prior sentence is <em>your deliverables<\/em>. Deliverables include things that you will be providing to franchisees such as:<\/span><\/p>\n<ul style=\"list-style-type: disc;\">\n<li><span style=\"color: #000000;\">What is your Training and how long is it;<\/span><\/li>\n<li><span style=\"color: #000000;\">Operations manuals and materials;<\/span><\/li>\n<li><span style=\"color: #000000;\">Are you giving a web presence;<\/span><\/li>\n<li><span style=\"color: #000000;\">Are you providing a start-up supply of products or marketing materials; <\/span><\/li>\n<li><span style=\"color: #000000;\">Are you providing any type of territory or protected area;<\/span><\/li>\n<li><span style=\"color: #000000;\">Onsite assistance;<\/span><\/li>\n<\/ul>\n<p><span style=\"color: #000000;\">Just to name a few.<\/span><\/p>\n<h2 style=\"text-align: justify;\"><strong><span style=\"color: #000000;\">But I Want to Know Now What My Franchise Fee Will Be?<\/span><\/strong><\/h2>\n<p style=\"text-align: justify;\"><span style=\"color: #000000;\">So you might be thinking, <em>\u201cCan\u2019t you just tell me now what a franchise fee would be for the type of business I operate?\u201d<\/em> The answer is no simply because your deliverables have not been defined yet. Not only have your deliverables not been defined, we also don\u2019t know what your raw cost will be in providing such deliverables to franchisees. There is really no magical number that we can pop in for your franchise fee. As we build your franchise system and take you through the all the <a href=\"https:\/\/www.thefranchisemaker.com\/how-to-franchise\">steps to franchise<\/a> not only will your deliverables defined, but we will also take into consideration other like-and-kind businesses offering franchises in your vertical and their current franchise fees (read more about <a href=\"https:\/\/www.thefranchisemaker.com\/building-a-franchise\">our strategy<\/a> when building your franchise).<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #000000;\">When identifying a franchise fee for your concept it is also important to take into consideration the fact that you are <em>new to franchising<\/em>. While we will do research and identify what your competitors are charging that does NOT necessarily mean that the same franchise fee will work for you. And let\u2019s not forget some franchise fees that your competitors are charging may be high on purpose to incorporate a commission for franchise brokers. One of the things you will have to ask yourself is are you franchising so you can pay some franchise broker a commission <span style=\"text-decoration: underline;\">or<\/span> are you franchising so you can provide an affordable and attractive opportunity for entrepreneurs. While franchise brokers could be tool in your toolbox they are definitely not the end all solution and could create more liability for you then what they are worth (check out this article for more on the topic of <a href=\"https:\/\/www.thefranchisemaker.com\/learningcenter\/franchise-legal-problems-due-to-sales-misrepresentations\/\">how franchise brokers can create a liability for you<\/a>).<br \/>\n<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #000000;\">When it comes to a franchise fee, what most people don\u2019t realize is that just because there are competitors charging a certain franchise fee now it doesn\u2019t mean that is where they started when they began franchising. As you grow and have multiple operators in different markets, slowly begin to brand your business and improve the deliverables you\u2019re providing to franchisees; then you may be in a position to command a higher franchise fee. Keep in mind that what you start out with as a franchise fee is not forever and can be changed at <em>any time<\/em>.<\/span><\/p>\n<h2 style=\"text-align: justify;\"><span style=\"color: #000000;\">Don&#8217;t Stress Over the Franchise Fee<\/span><\/h2>\n<p style=\"text-align: justify;\"><span style=\"color: #000000;\">When determining your franchise fee there are many things to take into consideration. It would be very reckless for anyone to simply throw out a number for your franchise fee without spending time to identify and examine what you will be providing for it. Don\u2019t worry! We will work closely with you to define your franchise fee and all the deliverables you will provide to your future franchisees. We will guide you through every step of the franchise process, to build an attractive, affordable and reasonable franchise program that you will be proud to offer. Call us directly at <a href=\"tel:+18776155177\"><strong>1-877-615-5177<\/strong><\/a> and we will be happy to answer all of your questions about franchise fees and franchising your business.<br \/>\n<\/span><\/p>\n<p><a href=\"https:\/\/www.thefranchisemaker.com\/about-us\" target=\"_blank\" rel=\"noopener noreferrer\"><img decoding=\"async\" class=\"aligncenter wp-image-1972 size-full\" src=\"https:\/\/www.thefranchisemaker.com\/learningcenter\/wp-content\/uploads\/2007\/12\/BBB-Torch-Award-Emblem-2.jpg\" alt=\"BBB Torch Award Winner\" width=\"294\" height=\"85\" \/><\/a> <a class=\"button btn btn-sm tfm-button request-info-button\" role=\"button\" href=\"#\">GET STARTED!<\/a><\/p>\n<ul>\n<li><a href=\"https:\/\/www.thefranchisemaker.com\/learningcenter\/making-sense-of-the-franchise-fee-and-territory\/\" target=\"_blank\" rel=\"noopener noreferrer\">Are Franchise Fees Based on the Territory<\/a><\/li>\n<li><a href=\"https:\/\/www.thefranchisemaker.com\/learningcenter\/market-and-sell-franchises-yourself\/\" target=\"_blank\" rel=\"noopener noreferrer\">Awarding Franchises Yourself<\/a><\/li>\n<li><a href=\"https:\/\/www.thefranchisemaker.com\/learningcenter\/a-custom-approach-to-franchising-your-business\/\" target=\"_blank\" rel=\"noopener noreferrer\">Customized Franchise Development<\/a><!-- x-tinymce\/html --><\/li>\n<li><a href=\"https:\/\/www.thefranchisemaker.com\/learningcenter\/what-are-the-elements-of-a-franchise-disclosure-document\/\" target=\"_blank\" rel=\"noopener noreferrer\">What is in a Franchise Disclosure Document<\/a><\/li>\n<li><a href=\"https:\/\/www.thefranchisemaker.com\/learningcenter\/franchise-fees-and-royalties-made-easy\/\" target=\"_blank\" rel=\"noopener noreferrer\">Royalties vs Franchise Fees<\/a><\/li>\n<li><a href=\"https:\/\/www.thefranchisemaker.com\/how-to-franchise\">Steps to Franchise Broken Down<\/a><\/li>\n<\/ul>\n<p><a href=\"https:\/\/www.google.com\/search?q=the+franchise+maker\" target=\"_blank\" rel=\"nofollow noopener\"><img decoding=\"async\" class=\"aligncenter wp-image-1972 size-full\" src=\"https:\/\/www.thefranchisemaker.com\/learningcenter\/wp-content\/uploads\/2023\/08\/GoogleFiveStars.jpg\" alt=\"See Our Google Reviews\" width=\"200\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"No doubt one of the questions you have as you\u2019re looking to franchise your business is, \u201cHow is the franchise fee determined?\u201d This is a great question simply because there is a misconception out there about how a franchise fee is determined. So let\u2019s answer this question by exploring what a franchise fee is really&#8230; ","protected":false},"author":1,"featured_media":4917,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-1315","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-how-to-franchise","entry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How the Franchise Fee is Determined<\/title>\n<meta name=\"description\" content=\"How do I know what my franchise fee will be? It&#039;s based on your deliverables. Read the break down on how the franchise fee is determined.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.thefranchisemaker.com\/learningcenter\/how-the-franchise-fee-is-determined\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How the Franchise Fee is Determined\" \/>\n<meta property=\"og:description\" content=\"How do I know what my franchise fee will be? It&#039;s based on your deliverables. Read the break down on how the franchise fee is determined.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.thefranchisemaker.com\/learningcenter\/how-the-franchise-fee-is-determined\/\" \/>\n<meta property=\"og:site_name\" content=\"The Franchise Maker Learning Center\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/TheFranchiseMaker\/\" \/>\n<meta property=\"article:published_time\" content=\"2015-11-23T23:02:40+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-01-09T19:34:11+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.thefranchisemaker.com\/learningcenter\/wp-content\/uploads\/2023\/09\/accounting-formulas-equations-for-accountants-female-accountant-working-with-calculator-and-laptop-1024x683.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1024\" \/>\n\t<meta property=\"og:image:height\" content=\"683\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Dave\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Dave\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"How the Franchise Fee is Determined","description":"How do I know what my franchise fee will be? It's based on your deliverables. Read the break down on how the franchise fee is determined.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.thefranchisemaker.com\/learningcenter\/how-the-franchise-fee-is-determined\/","og_locale":"en_US","og_type":"article","og_title":"How the Franchise Fee is Determined","og_description":"How do I know what my franchise fee will be? It's based on your deliverables. Read the break down on how the franchise fee is determined.","og_url":"https:\/\/www.thefranchisemaker.com\/learningcenter\/how-the-franchise-fee-is-determined\/","og_site_name":"The Franchise Maker Learning Center","article_publisher":"https:\/\/www.facebook.com\/TheFranchiseMaker\/","article_published_time":"2015-11-23T23:02:40+00:00","article_modified_time":"2025-01-09T19:34:11+00:00","og_image":[{"width":1024,"height":683,"url":"https:\/\/www.thefranchisemaker.com\/learningcenter\/wp-content\/uploads\/2023\/09\/accounting-formulas-equations-for-accountants-female-accountant-working-with-calculator-and-laptop-1024x683.jpg","type":"image\/jpeg"}],"author":"Dave","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Dave","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.thefranchisemaker.com\/learningcenter\/how-the-franchise-fee-is-determined\/#article","isPartOf":{"@id":"https:\/\/www.thefranchisemaker.com\/learningcenter\/how-the-franchise-fee-is-determined\/"},"author":{"name":"Dave","@id":"https:\/\/www.thefranchisemaker.com\/learningcenter\/#\/schema\/person\/d16fb922128db49e180c76b203487516"},"headline":"How the Franchise Fee is Determined","datePublished":"2015-11-23T23:02:40+00:00","dateModified":"2025-01-09T19:34:11+00:00","mainEntityOfPage":{"@id":"https:\/\/www.thefranchisemaker.com\/learningcenter\/how-the-franchise-fee-is-determined\/"},"wordCount":812,"publisher":{"@id":"https:\/\/www.thefranchisemaker.com\/learningcenter\/#organization"},"image":{"@id":"https:\/\/www.thefranchisemaker.com\/learningcenter\/how-the-franchise-fee-is-determined\/#primaryimage"},"thumbnailUrl":"https:\/\/www.thefranchisemaker.com\/learningcenter\/wp-content\/uploads\/2023\/09\/accounting-formulas-equations-for-accountants-female-accountant-working-with-calculator-and-laptop.jpg","articleSection":["how to franchise"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/www.thefranchisemaker.com\/learningcenter\/how-the-franchise-fee-is-determined\/","url":"https:\/\/www.thefranchisemaker.com\/learningcenter\/how-the-franchise-fee-is-determined\/","name":"How the Franchise Fee is Determined","isPartOf":{"@id":"https:\/\/www.thefranchisemaker.com\/learningcenter\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.thefranchisemaker.com\/learningcenter\/how-the-franchise-fee-is-determined\/#primaryimage"},"image":{"@id":"https:\/\/www.thefranchisemaker.com\/learningcenter\/how-the-franchise-fee-is-determined\/#primaryimage"},"thumbnailUrl":"https:\/\/www.thefranchisemaker.com\/learningcenter\/wp-content\/uploads\/2023\/09\/accounting-formulas-equations-for-accountants-female-accountant-working-with-calculator-and-laptop.jpg","datePublished":"2015-11-23T23:02:40+00:00","dateModified":"2025-01-09T19:34:11+00:00","description":"How do I know what my franchise fee will be? It's based on your deliverables. Read the break down on how the franchise fee is determined.","breadcrumb":{"@id":"https:\/\/www.thefranchisemaker.com\/learningcenter\/how-the-franchise-fee-is-determined\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.thefranchisemaker.com\/learningcenter\/how-the-franchise-fee-is-determined\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.thefranchisemaker.com\/learningcenter\/how-the-franchise-fee-is-determined\/#primaryimage","url":"https:\/\/www.thefranchisemaker.com\/learningcenter\/wp-content\/uploads\/2023\/09\/accounting-formulas-equations-for-accountants-female-accountant-working-with-calculator-and-laptop.jpg","contentUrl":"https:\/\/www.thefranchisemaker.com\/learningcenter\/wp-content\/uploads\/2023\/09\/accounting-formulas-equations-for-accountants-female-accountant-working-with-calculator-and-laptop.jpg","width":6240,"height":4160,"caption":"How the Franchise Fee is Determined"},{"@type":"BreadcrumbList","@id":"https:\/\/www.thefranchisemaker.com\/learningcenter\/how-the-franchise-fee-is-determined\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Franchises","item":"https:\/\/www.thefranchisemaker.com\/learningcenter\/"},{"@type":"ListItem","position":2,"name":"How the Franchise Fee is Determined"}]},{"@type":"WebSite","@id":"https:\/\/www.thefranchisemaker.com\/learningcenter\/#website","url":"https:\/\/www.thefranchisemaker.com\/learningcenter\/","name":"The Franchise Maker Learning Center","description":"The Franchise Maker provides a Learning Center with over 150+ articles on various topics related to franchising your business.","publisher":{"@id":"https:\/\/www.thefranchisemaker.com\/learningcenter\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.thefranchisemaker.com\/learningcenter\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.thefranchisemaker.com\/learningcenter\/#organization","name":"The Franchise Maker","url":"https:\/\/www.thefranchisemaker.com\/learningcenter\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.thefranchisemaker.com\/learningcenter\/#\/schema\/logo\/image\/","url":"https:\/\/www.thefranchisemaker.com\/learningcenter\/wp-content\/uploads\/2020\/12\/Franchise-Maker.jpg","contentUrl":"https:\/\/www.thefranchisemaker.com\/learningcenter\/wp-content\/uploads\/2020\/12\/Franchise-Maker.jpg","width":180,"height":180,"caption":"The Franchise Maker"},"image":{"@id":"https:\/\/www.thefranchisemaker.com\/learningcenter\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/TheFranchiseMaker\/","https:\/\/www.linkedin.com\/company\/the-franchise-maker\/about\/","https:\/\/www.youtube.com\/user\/davewalsd\/videos"]},{"@type":"Person","@id":"https:\/\/www.thefranchisemaker.com\/learningcenter\/#\/schema\/person\/d16fb922128db49e180c76b203487516","name":"Dave"}]}},"_links":{"self":[{"href":"https:\/\/www.thefranchisemaker.com\/learningcenter\/wp-json\/wp\/v2\/posts\/1315","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.thefranchisemaker.com\/learningcenter\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thefranchisemaker.com\/learningcenter\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thefranchisemaker.com\/learningcenter\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thefranchisemaker.com\/learningcenter\/wp-json\/wp\/v2\/comments?post=1315"}],"version-history":[{"count":0,"href":"https:\/\/www.thefranchisemaker.com\/learningcenter\/wp-json\/wp\/v2\/posts\/1315\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.thefranchisemaker.com\/learningcenter\/wp-json\/wp\/v2\/media\/4917"}],"wp:attachment":[{"href":"https:\/\/www.thefranchisemaker.com\/learningcenter\/wp-json\/wp\/v2\/media?parent=1315"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thefranchisemaker.com\/learningcenter\/wp-json\/wp\/v2\/categories?post=1315"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thefranchisemaker.com\/learningcenter\/wp-json\/wp\/v2\/tags?post=1315"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}