Free Calculator

Franchise Royalty Fee Calculator

Enter location revenue, a flat royalty rate or tiered bands, your brand fund percentage, tech fee and any minimum royalty. See what each location pays, what the franchisor collects each month and year, and what franchisees keep after fees.

Your Information

Values shown are examples. Enter the terms from your own franchise agreement.

Location revenue
Royalty structure

Charged when the percentage royalty is lower. Use 0 for no minimum.

Your Results

Total franchisor revenue (monthly)

$19,500

$234,000 per year across 5 locations

Royalties / month

$14,000

Effective fee rate

9.8%

All fees ÷ gross revenue

Network totals, monthly and annual
NetworkMonthlyAnnual
Gross revenue$200,000$2,400,000
Royalties$14,000$168,000
Brand / marketing fund$4,000$48,000
Technology fees$1,500$18,000
Total to franchisor$19,500$234,000
Franchisee net after fees$180,500$2,166,000

Where each location's revenue goes (monthly)

Each location$40,000 gross · $36,100 net
  • Royalty
  • Marketing fund
  • Tech fee
  • Franchisee net

Franchisee net is gross revenue minus franchise fees only. It does not include rent, payroll or other operating costs.

Using the Franchise Royalty Calculator

How to use the royalty calculator

Choose whether every location has the same monthly gross revenue or enter each location separately. Then enter the royalty terms from your franchise agreement: a flat percentage or tiered bands, the brand or marketing fund percentage, any flat monthly technology fee per location, and a minimum monthly royalty if your agreement has one. Results update as you type, monthly and annually, for each location and for the whole network.

Flat versus tiered royalties

A flat royalty charges the same percentage on all gross revenue. In this calculator, tiered bands work like tax brackets: each band’s rate applies only to the revenue that falls inside that band, so a location earning more pays a lower rate on its top slice. Some agreements instead apply a single rate to all revenue once a threshold is reached. If yours works that way, use the flat option with the rate that applies at that revenue level.

Minimum royalties and fixed fees

A minimum royalty sets a floor: when the percentage royalty comes out lower, the location pays the minimum instead. The calculator marks those locations so you can see where the floor applies. Flat technology or software fees are charged per location regardless of revenue, which is why they weigh more heavily on smaller locations.

What this calculator leaves out

Initial franchise fees, renewal and transfer fees, required supplier purchases and local advertising requirements are not included, and franchisee net is revenue minus franchise fees only, before rent and payroll. Your franchise agreement and disclosure document are the source of truth for every fee.

Frequently asked questions

How is a franchise royalty calculated?

Most agreements charge royalties as a percentage of gross revenue for a period, usually monthly. This calculator multiplies each location’s monthly gross by the royalty rate (or applies your tiered bands), raises it to the minimum royalty if needed, then adds the brand fund percentage and the flat tech fee.

What is a typical franchise royalty rate?

Rates vary by brand and industry and are set in each franchise agreement, so there is no single right number. Compare the fees disclosed by the specific brands you are considering and model each one here side by side.

What is the difference between a royalty and a brand fund fee?

A royalty pays the franchisor for the right to use the brand and system. A brand or marketing fund fee is collected for advertising and marketing that benefits the network. Both are usually a percentage of gross revenue, and this calculator shows them separately.

Does franchisee net include operating costs?

No. It is gross revenue minus franchise fees only. To include rent, payroll and other costs and see when a location breaks even, use the Franchise Break-Even Calculator.

How do tiered royalty bands work here?

Each band covers a slice of monthly gross revenue. With bands of 8% up to $30,000 and 6% above it, a location with $40,000 in gross pays 8% of $30,000 plus 6% of $10,000, which is $3,000.

Ready to automate your education business?

Start your free trial today and experience the full power of Calimatic.

No credit card required
14-day free trial
Cancel anytime