Benefit from such marketing

[Rakhirandiseo]

The difference between a franchise fee and a royalty After acquiring a franchise, the company pays two types of fees. Immediately after the deal, the brand owner receives a lump sum payment, i.e. a fee for the opportunity to work under a well-known brand. The second type of payment is called "royalty" - it is paid monthly for the support provided. Read also What is a royalty in a franchise and how to calculate it Read more The franchise fee gives the company the right to use the trademark, and the franchisor also provides a detailed description of the business model.

Which includes a business book, brand book, and self employed database documents. In addition, the cost sometimes includes training for the partner company's employees. When a franchisee wants to open another business under the same brand, a second deposit is usually required. Also, the agreement between the main company and its partners stipulates that the latter must pay royalties every month. These can be fixed amounts or a certain percentage of the company's turnover or revenue.

Thanks to the royalty, the partner receives such services as updating standards, finalizing the IT system, adapting marketing materials. The franchisor can include the marketing fee in the royalty or make it a separate payment. With the funds received from the franchisee, the brand owner conducts a large-scale advertising campaign that runs throughout the country and even beyond its borders, if required. It is worth noting that such activities occur on a regular basis.