{"id":48,"date":"2011-05-31T18:55:00","date_gmt":"2011-05-31T18:55:00","guid":{"rendered":"http:\/\/thefranchisemaker.com\/blog\/what-a-franchisee-gets-for-their-royalty-payments"},"modified":"2021-06-28T19:17:49","modified_gmt":"2021-06-28T19:17:49","slug":"what-a-franchisee-gets-for-their-royalty-payments","status":"publish","type":"post","link":"https:\/\/www.thefranchisemaker.com\/learningcenter\/what-a-franchisee-gets-for-their-royalty-payments\/","title":{"rendered":"What a Franchisee Gets for Their Royalty Payments"},"content":{"rendered":"<p style=\"text-align: justify;\"><span style=\"color: #000000;\">Many people realize that owning and operating a franchise is <em>one of the easiest ways to become a successful business owner<\/em>.\u00a0As a franchisor, you will collect a one-time franchise fee. This franchise fee is intended to reimburse you for getting your new franchisee trained, setup and running their business <a href=\"https:\/\/www.thefranchisemaker.com\/learningcenter\/how-the-franchise-fee-is-determined\/\" target=\"_blank\" rel=\"noopener\">(more on the franchise fee)<\/a>. In other words you are collecting a fee for your time, energy and resources used. Once your franchisee opens for business they will also be making ongoing royalty payments to you.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #000000;\">Franchisees may not understand the need for the royalty fees at first. However it becomes more evident as time goes on that royalty payments create a win-win situation for both the you and your franchisees <a href=\"https:\/\/www.thefranchisemaker.com\/learningcenter\/is-it-true-that-franchise-royalty-fees-are-always-5-of-revenues\/\" target=\"_blank\" rel=\"noopener\">(find out how the royalty fee can be structured)<\/a>. Franchisees make royalty payments, in essence, as contributions to the entire system. The payments are used to maintain the system and ensure that everything flows smoothly between you and your franchisees. Royalty payments are primarily for your brand recognition and continued use of your proven methods, techniques, and system. This means that your franchisees get:<\/span><\/p>\n<ul>\n<li><span style=\"color: #000000;\">Use of your name;<\/span><\/li>\n<li><span style=\"color: #000000;\">Protection of your name;<\/span><\/li>\n<li><span style=\"color: #000000;\">Ongoing permission to use your proprietary methods and \u201cknow how\u201d to operate your business in their area;<\/span><\/li>\n<li><span style=\"color: #000000;\">Ongoing and immediate support for when your franchisee needs assistance (technical, operational, sales, personnel, etc.);<\/span><\/li>\n<li><span style=\"color: #000000;\">Training on new processes, advances, techniques or methods as you develop them;<\/span><\/li>\n<li><span style=\"color: #000000;\">Ability to take advantage of preferred vendors and suppliers which leads to stronger buying power;<\/span><\/li>\n<li><span style=\"color: #000000;\">National Account relationships that either you intend to establish, have already established or will continue to establish. Your franchisees can take advantage of these accounts in their area;<\/span><\/li>\n<li><span style=\"color: #000000;\">The \u201cFamily Concept\u201d by which one of your franchisees creates an advertising or marketing piece or develops a new profit center (service) that you incorporate into all franchise operations. Everyone benefits from the efforts of each other; and<\/span><\/li>\n<li><span style=\"color: #000000;\">A support network among your franchisees stepping up to help each other. It is not just one person out there operating your business, but a group of business owners, all part of your system. In other words, you are creating a <em><strong>powerful<\/strong> <\/em>culture.<\/span><\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><span style=\"color: #000000;\">Royalty payments also enable you to fund the growth of your entire system with continuous research and development <a href=\"https:\/\/www.thefranchisemaker.com\/learningcenter\/when-franchising-providing-ongoing-value-to-franchisees\/\" target=\"_blank\" rel=\"noopener\">(find out other ways to provide franchisees with ongoing value)<\/a>. When up-to-date with industry trends (and technological advances, if applicable), this may lead to the creation and marketing of new services and\/or products. All of which your franchisees will benefit from to grow their business.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #000000;\">As a\u00a0franchisor, one of your responsibilities will be to continue to develop and implement various advertising and marketing initiatives <a href=\"https:\/\/www.thefranchisemaker.com\/learningcenter\/what-is-my-role-as-a-franchisor\/\" target=\"_blank\" rel=\"noopener\">(see our article that explains more about your responsibilities as a franchisor)<\/a>. These initiatives can be used nationally or locally.\u00a0Each of your franchisees will immediately benefit from such initiatives. Over time, your system&#8217;s brand becomes increasingly identifiable. This translates to increased business and thus <span style=\"text-decoration: underline;\">more<\/span> profits for everyone.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #000000;\">Franchisees join a franchise system,\u00a0to be part of something <em><strong>larger<\/strong><\/em>, something they are <em><strong>unable to<\/strong><\/em> do themselves. They soon realize that the success of their business is (to a large extent) attributed to the strength of the entire system. There is power in numbers. To learn more about the value and benefits of royalties, call us directly at <strong>1-877-615-5177<\/strong> or simply <a href=\"https:\/\/www.thefranchisemaker.com\/contactus.php\" target=\"_blank\" rel=\"noopener\">fill out our quick and easy contact form<\/a> and we will be happy to talk with you.<\/span><\/p>\n<p><a href=\"https:\/\/www.thefranchisemaker.com\/about-us\" target=\"_blank\" rel=\"noopener\"><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=\"\" width=\"294\" height=\"85\" \/><\/a><\/p>\n<ul>\n<li><a href=\"https:\/\/www.thefranchisemaker.com\/learningcenter\/franchise-fees-and-royalties-made-easy\/\" target=\"_blank\" rel=\"noopener\">Understanding Royalty Fees vs Franchise Fees<\/a><\/li>\n<li><a href=\"https:\/\/www.thefranchisemaker.com\/learningcenter\/how-the-cost-of-a-franchise-is-determined\/\" target=\"_blank\" rel=\"noopener\">Figuring Out the Total Cost of Your Franchise<\/a><\/li>\n<li><a href=\"https:\/\/www.thefranchisemaker.com\/learningcenter\/how-to-structure-a-franchise\/\" target=\"_blank\" rel=\"noopener\">Structuring Your Franchise Includes Royalties<\/a><\/li>\n<li><a href=\"https:\/\/www.thefranchisemaker.com\/learningcenter\/what-are-the-elements-of-a-franchise-disclosure-document\/\" target=\"_blank\" rel=\"noopener\">Breaking Down the Franchise Disclosure Document<\/a><\/li>\n<li><a href=\"https:\/\/www.thefranchisemaker.com\/learningcenter\/how-to-make-money-franchising-your-business\/\" target=\"_blank\" rel=\"noopener\">More Ways You Can Make Money When Franchising<\/a><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"Many people realize that owning and operating a franchise is one of the easiest ways to become a successful business owner.\u00a0As a franchisor, you will collect a one-time franchise fee. This franchise fee is intended to reimburse you for getting your new franchisee trained, setup and running their business (more on the franchise fee). In&#8230; ","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-48","post","type-post","status-publish","format-standard","hentry","category-how-to-franchise","entry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What a Franchisee Gets for Their Royalty Payments<\/title>\n<meta name=\"description\" content=\"Once your franchisee is opened for business they will be making ongoing royalty payments to you. 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