The primary factor in determining the licensing fee that a franchisor will charge is the supply and demand for that license. Is this true or false

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eemoore
Dec 12, 2016 03:57 AM 0 Answers
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The franchisor charges a franchise fee. A licensor charges a licensing fee.. There are a number of factors in determining the franchise fee. Is it for one location? Is it for a large territory? Are you trying to build a large number quickly? Can you support many franchisees? Are you a new or older franchise? Are you in growth stage? The franchisor typically makes more money as they grow and the money is from royalties not franchise fees. $50,000 may sound great but 5% royalty on a store doing $1.5 Million is $75,000 per year per franchise. The typical franchise fee is $25,000 to $60,000. Think long term value not short term franchise fee. The more stores the better the deals for franchisees which make you more valuable.

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