franchise fee
License to operate
A franchise fee is the upfront payment a franchisee makes to a franchisor for the right to operate under the brand name and business model.
This one-time cost covers initial training, support, and access to proprietary systems: The franchise fee for opening a McDonald's runs over $40,000.
Distinct from ongoing royalties, which are percentage-based payments on revenue.
- paymentFulfilling a financial obligation
- investmentDeploying capital for returns
- due diligencePre-transaction reasonable care
- revenueBusiness income total
- contractEnforceable written agreement
royalty · startup costs · capital · expense · grand opening · brand licensing · operating costs · transaction · non-compete agreement · compliance · profit margin · installment · termination clause · financial planning · upfront payment · initial investment · lump sum · service charge
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