Advertising Fee

WhichFranchise.ie:

Advertising fees are used to advertise the franchise system. Normally an advertising fee is based upon a percentage of gross sales or net sales (though it can sometimes be a stated amount). They typically range from 1% to 5% of gross sales.

The fees are often put into a regional or national fund to be used for either regional or national marketing or advertising campaigns.

Franchisors in their start-up phase may not ask for an advertising fee to be paid, as they would not expect to achieve any real benefit, i.e. in terms of increase in sales or brand awareness, via a regional or national campaign. They will however expect the franchisee to pay for local advertising to promote their franchise.

You need to know:

* What the fee is?

* Is the same fee paid throughout the network?

* How it compares with other systems?

* What you get for your money?

* If the franchisor can spend the fee on how they see fit?

* Will an advertising fee benefit the system?

* Or your franchise?