How to Determine Franchise Royalties

Setting the right percentage is a balancing act.
1 min read
Opinions expressed by Entrepreneur contributors are their own.

When designing a franchise, it is tempting to set high royalties to generate maximum income from franchisees. However, setting royalties is a balancing act. You want a fair financial return, but if you set royalties too high, the financial burden may mean franchisees can't compete with other businesses. If that happens, you will wind up with less in the end.

Excerpted from Grow Your Business

More from Entrepreneur

Whether you are launching or growing a business, we have all the business tools you need to take your business to the next level, in one place.
Enroll Now

Are paying too much for business insurance? Do you have critical gaps in your coverage? Trust Entrepreneur to help you find out.
Get Your Quote Now

One-on-one online sessions with our experts can help you start a business, grow your business, build your brand, fundraise and more.
Book Your Session

Latest on Entrepreneur

My Queue

There are no Videos in your queue.

Click on the Add to next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to next to any article to save to your queue.

There are no Podcasts in your queue.

Click on the Add to next to any podcast episode to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.