We have completed a study on the changes in Ongoing Fees in the franchise industry using our data from 2013 – 2016 to publish the report. We researched how franchise brands have changed the percent they apply for their royalty and advertising fees and how these changes are affecting the industry. We studied 1,602 franchise systems between 2013 – 2016 and segmented them by franchise sector.
This latest Facts & Figures revealed that although average royalty and advertising fees for the franchise industry had slight reductions, upon further analysis into the specific franchise sectors, you’ll find more significant changes. This report focused on an area of investment that prospective franchisees should be aware of.
We noted that each of the ten franchise sectors in this report all reported changes in their Ongoing Fee rates.
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A Franchise Disclosure Document (“FDD”) presents key components of the franchise program including the obligations of the franchisor and franchisees.
As franchise system development becomes more competitive franchise systems are employing a new strategy to grow their brand and increase franchise sales.
The composition of the franchise investment differs in key areas such as: franchise fees, royalty rates, territory protections and Item 19 disclosures.
Data has become essential to having a successful franchise development team. Those that maximize the power of data will sell more franchises.
When reviewing an FDD, we always keep our eyes out for any errors. The error that is the most troublesome for us is when we see Item 20 errors.