[pcsofdpuzzle]

What is the average monthly royalty fees? I heard that mcdonald's royalty fee is 12.5% while wendy's is 4%. Is the royalty fee based on the market value of the business?

[richlanxsabelle]

The royalty or service fee is a continuing fee that you pay the franchiser for the use of his trademark and business system and for his continuing support. It's a percentage of your sales. The average royalty fee ranges from 3% to 5% of gross sales per month.

[bianca]

I think that 12.5% is too high for royalty fees. I have researched a lot on franchising fees and royalty fees and the average number that I can see on majority of franchises available ranges from 3% to 5%. If McDonald's royalty fees are that high, even if it may be a good income generating opportunity, I would not go for it, they're charging too much.

[audrey]

Maybe it depends on the company. If the company is well-known enough like McDonald's, then they can charge a high royalty fee, even above the average. My assumption is that McDonald's is really that profitable to earn a franchise owner a still decent income even if the royalty fee is very high.

[aehtbieseht]

I think high royalty fees are really applicable only for those giant companies that can provide the best service for your franchise. So If I were to ask I'll start from my own ideas and put up a business.

[spielmanmj]

Hi,

Sorry about reviving an old thread but I had a question about this very subject. Do most franchisers charge an upfront fee in addition to royalties or is it one or the other? If they do charge the lump sum, what is the range that is typical. I realize that this is widely varied with a lot of really popular ones going for millions, but what about smaller, lesser known ones. And forgive my newbie knowledge but are royalties typically a percentage of net profit or gross revenue?

Any help would be great!

Mike

[jay.robinson15]

McDonald's is up that high now? I though they were still around 4%.