Royalties

Royalties are the royalty paid to the franchisor by its franchisees.

Royalties remunerate the Franchisor for services rendered to the Franchisee throughout the term of the Franchise Agreement.

The services rendered by the franchisor in return for the royalties may consist in particular of:

•  technical and commercial assistance,
•  the animation of the network,
•  the right to operate the brand,
•  the right to use the concept and know-how,
•  the use of the franchisor’s trademark,
•  continuous training of the franchisee and/or its staff,
•  the services rendered by the purchasing centre,
•  territorial exclusivity granted.

The royalty is generally calculated according to the turnover achieved by the franchisee.

It can also consist of a monthly or quarterly fee.

This fee may also include a fixed part and a variable part.

The franchise agreement must specify the amount of the fee, its method of calculation as well as its terms of payment.