Are there rules of thumb to determine initiation and unit pricing?
Answer Franchise Foundations has a free franchise legal help advice hotline where you can discuss your situation with a franchise attorney. Go to: http://www.franchisefoundations.com/franchiseattorney.html Going to the specifics of your question, there are no general rules of thumb or set formulas to determine the initial, one-time franchise fee or ongoing royalty payments. Typically, initial franchise fees range from $15,000 to $50,000 (McDonalds charges a $45,000 franchise fee, for example). Ongoing franchise royalty payments range from 2% to 10% on gross sales. In a service business, higher royalty fees are possible because higher profit margins generally allow this. Another tip is to examine the McDonalds franchise program and see how they structure their franchise relationship. Although they’re in a different industry, they are still the world’s best and most recognized franchise. The Franchise Foundations website has a page dedicated to the McDonalds franchise program, where you
