--- title: "Understanding Franchise Fees: What to Charge and Why | FranchiseED" description: "A comprehensive breakdown of franchise fees, royalties, and how to structure them for mutual success." lang: en-AU json-ld: | [ { "@context": "https://schema.org", "@type": "Article", "headline": "Understanding Franchise Fees: What to Charge and Why", "description": "A comprehensive breakdown of franchise fees, royalties, and how to structure them for mutual success.", "datePublished": "2026-01-07T00:00:00+00:00", "dateModified": "2026-04-19T23:16:54.673177+00:00", "image": "https://franchise-ed.com.au/og-image.png", "author": { "@type": "Person", "name": "Kerry Miles CFE", "url": "https://franchise-ed.com.au/about" }, "publisher": { "@type": "Organization", "name": "FranchiseED", "url": "https://franchise-ed.com.au", "logo": { "@type": "ImageObject", "url": "https://franchise-ed.com.au/og-image.png" } }, "mainEntityOfPage": { "@type": "WebPage", "@id": "https://franchise-ed.com.au/blog/understanding-franchise-fees" }, "inLanguage": "en-AU", "isAccessibleForFree": true, "speakable": { "@type": "SpeakableSpecification", "cssSelector": [ "h1", "article h2", "[data-speakable]" ] } }, { "@context": "https://schema.org", "@type": "BreadcrumbList", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://franchise-ed.com.au" }, { "@type": "ListItem", "position": 2, "name": "Blog", "item": "https://franchise-ed.com.au/blog" }, { "@type": "ListItem", "position": 3, "name": "Understanding Franchise Fees: What to Charge and Why", "item": "https://franchise-ed.com.au/blog/understanding-franchise-fees" } ] }, { "@context": "https://schema.org", "@type": "WebSite", "name": "FranchiseED", "url": "https://franchise-ed.com.au", "publisher": { "@type": "Organization", "name": "FranchiseED", "url": "https://franchise-ed.com.au", "logo": { "@type": "ImageObject", "url": "https://franchise-ed.com.au/og-image.png" } } } ] --- [![FranchiseED](/assets/franchise-ed-logo-CngErwKv.png)](/) Coaching & Mentoring[About](/about)[Resources](/blog)[Testimonials](/testimonials)[FAQ](/faq)[Contact](/contact) [Book a Call with Kerry](/schedule-consultation) Back to Franchise Articles Building and Growing Your Franchise System # Understanding Franchise Fees: What to Charge and Why Kerry Miles CFE 7 January 2026 7 min read Setting appropriate franchise fees is crucial for creating a sustainable franchise system. Fees must be sufficient to support your franchisees whilst generating reasonable returns for both parties. ## Initial Franchise Fee The initial franchise fee is a one-time payment made when a franchisee joins your network. This fee typically covers: - The right to use your brand and systems - Initial training programme - Site selection assistance - Pre-opening support - Initial marketing materials - Operations manual and documentation In Australia, initial franchise fees typically range from $20,000 to $100,000 or more, depending on the industry and brand strength. The key is ensuring your fee reflects the genuine value you provide. ## Ongoing Royalties Royalties are ongoing payments, usually calculated as a percentage of gross sales. These fees fund the franchisor's ongoing support services, system development, and network management. Common royalty structures include: - **Percentage of sales:** Typically 4-8% of gross turnover - **Fixed fee:** A set amount paid weekly or monthly - **Sliding scale:** Percentage varies based on sales volume ## Marketing Fund Contributions Most franchise systems require contributions to a central marketing fund, typically 1-3% of gross sales. This fund supports national advertising, brand development, and marketing initiatives that benefit the entire network. 90-day mentoring program ### Ready to build a franchise that actually scales? The Franchise-Ready Accelerator is a one-on-one program that helps you systemise, document, and launch a franchise model the right way — guided by Kerry Miles CFE. [Explore the Franchise-Ready Accelerator](/services/franchise-ready-accelerator) Under the Franchising Code of Conduct, franchisors must provide annual financial statements for the marketing fund, ensuring transparency in how contributions are used. ## Other Fees and Charges Additional fees might include: - Technology fees for POS systems and software - Training fees for additional staff training - Audit fees for compliance reviews - Transfer fees when a franchise is sold - Renewal fees at the end of the franchise term ## Setting the Right Balance Your fee structure should allow franchisees to achieve a reasonable return on their investment whilst enabling you to deliver quality support. Conduct thorough financial modelling to ensure your fees are competitive and sustainable. Remember, the goal isn't to maximise fees but to create a system where both franchisor and franchisees prosper. Successful franchisees lead to a successful franchise network. 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Running one business and running a franchise network are two very different things. ... 12 November 2025 2 min read ](/blog/the-mindset-shift-every-franchisor-must-make-operator-to-business-builder)[ Building and Growing Your Franchise System ### Operations Manuals Are Not Step One (Here’s What Is) When people first think about franchising, one of the first things they often say to me is: “I guess I need to write an operations manual.” And yes, you will need one eventually. But here’s the thing:... 5 November 2025 2 min read ](/blog/operations-manuals-are-not-step-one-heres-what-is) ## Still have questions? The best way to get clear answers about your specific situation is a direct conversation. Book a Call with Kerry — no obligation, no sales pressure, just straight answers. 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