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Franchise Royalty Calculator

Work out franchise royalty instantly with clear inputs, formula shown and shareable results.

About Franchise Royalty Calculator

Ongoing franchise cost is rarely just the royalty. Adding the national marketing levy and fixed technology or support charges typically takes the all-in burden to 8-10% of gross sales, which is the figure to use when modelling outlet profitability.

Formulas

Total fees

Total = Gross sales x (Royalty % + Marketing levy %) + Fixed fees

Effective rate

Effective % = Total fees / Gross sales x 100

Worked example

With the default values below, Franchise Royalty Calculator returns Total franchise fees payable of $64,500.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Gross sales for the period
750,000
Royalty rate on gross sales
6
National marketing levy
2
Fixed technology or support fee
4,500

Results

Total franchise fees payable
$64,500.00
Royalty on sales
$45,000.00
Marketing levy
$15,000.00
Total fees as % of sales
8.60%

Step by step

  1. 1Values used
  2. 2Total fees
  3. 3Effective rate
  4. 4Total franchise fees payable= 64,500.00
  5. 5Royalty on sales= 45,000.00
  6. 6Marketing levy= 15,000.00
  7. 7Total fees as % of sales= 8.60

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation into account.
  • Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

Is royalty charged on gross or net sales?

Most systems use gross sales excluding sales tax. Because it is charged before your costs, a royalty is payable even in a loss-making month.

Can fees be renegotiated?

Rarely mid-term. The negotiating window is at signature and at renewal, and territory or multi-unit commitments are the usual levers.

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