Royalty (franchise)

Royalty — the franchisor’s recurring percentage of your sales, PH norm 4–12% of gross plus often a 2–5% marketing fund. Priced on gross, not profit: at cart-level margins a 5% royalty on gross can be 20–30% of your net. The companion to check every time: mandatory purchasing of inputs from the franchisor at their markup — economically a second royalty that never appears in the fee table, and the exact claim contested in the course’s Potato Corner promo-vs-teardown exercise.

First used in: 4.1 · Semi-passive businesses: the honest tier