What is a Franchise fee?

Franchise fee is basically the amount of money you have to pay for the usage of the business model of the company. Franchise fees come in two types, one is the one time payment, and the other is the royalty fee.

The one time payment is usually a large amount of money and is usually paid out before starting the franchise contract. Upon the renewal of the franchising contract, it is paid out again.

The royalty fee is a recurring fee that is usually based of on a predetermined percentage of your gross sales, and will be paid out regularly, usually monthly or quarterly.

This video tackles what franchising fee is.