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The economicsRoyalty
An ongoing payment, usually a percentage of revenue, for continued use of the brand and ongoing operational support.
Where this sits
The flow of money between the parties determines the health of the whole system. If partners do not profit, no system is sustainable however strong the brand.
In practice
This section summarises United States federal regulation (16 CFR Part 436) as published by the Federal Trade Commission. Rules change and differ by country — check the source before acting. For reference only; not legal advice.
The royalty is rarely the only recurring payment. In a US disclosure document Item 6 requires a table headed "OTHER FEES" listing all other fees payable to the franchisor or its affiliates — or collected by them on behalf of a third party.
Read Item 6 as one number, not as a list. Royalty plus marketing contribution plus technology, training, audit and renewal fees is the real ongoing load on a unit's margin, and it is that total — not the headline royalty rate — that belongs in your model.
Source: 16 CFR § 436.5(f) — Item 6: Other Fees · Reviewed: 2026-09-02