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Franchise Fees: What's Typical and Why Do They Exist

Franchise Fees: What's Typical and Why Do They Exist

Starting a franchise can be an excellent way for a person to run their own business while taking advantage of a brand's proven reputation. However, these added benefits come with some extra costs. Understanding how franchising fees work can help potential business owners decide if it is right for them.

What Are Franchising Fees and How Much Do They Cost?

A franchising fee is essentially a fee that the business owner must pay to access the brand's name, proprietary business systems, special recipes, and more. This entry fee gives people a lot of the things they need to start a business. However, franchise owners must also purchase the property, building, and other general business requirements. Therefore, the franchise fee alone will not cover all startup costs. An average franchise fee costs somewhere between $20,000 to $50,000, and then the owner may need to pay around $150,000 to $200,000 for other business startup expenses.

Are Royalties the Same as Franchising Fees?

Royalties get a little confusing because they are also a fee a franchisee has to pay to their franchisor for using the business' name and reputation. However, unlike a franchising fee, royalties are not a flat fee paid only at the business's startup. Instead, a royalty fee is a percentage paid based on the amount of profit the business makes. It is usually somewhere from four to 12 percent and is collected on a monthly or quarterly basis. The percentage collected is generally higher when a franchise's revenues themselves are higher.

Hidden Franchising Fees to Be Aware Of

Royalty fees and standard franchise fees are the most common type of fee, but it is essential to read all agreements before starting a franchise carefully. There can be quite a few other little fees that add up. For example, most franchises will charge a marketing fee. Like a royalty, this is usually a percentage of a franchisee's monthly revenue. Another potential charge is for materials. Some franchises may require owners to purchase branded cups, bags, and other items from a specific provider, which may cost more than generic items. Some franchisors even have requirements for where food and other materials can be purchased.

Conclusion

Not all franchises are alike, so it’s vital that you do your research before investing. Ask plenty of questions and know what you’re getting into. At The Tutoring Center Franchise Corp® the franchise and royalty fees are very reasonable and we are the only after-school franchisor that offers you a flat rate royalty payment for the life of your agreement (subject to an annual inflation adjustment).

At The Tutoring Center Franchise Corp®, our programs help children achieve long-term success, build concentration and focus, and, with our outstanding instructors, find the love of learning. If you’re interested in owning a franchise or learning more about The Tutoring Center Franchise Corp®, please visit our website or click below to request more information.

STEP 1 — Request Information

STEP 2 — Complete our Online Virtual Discovery Process!

STEP 3 — Become a Franchisee of The Tutoring Center®


  • Tutoring Center logo

    The Tutoring Center® is exactly what my child needed to give him an extra boost for school. My son looks forward to going to tutoring, even after a whole day at school. I feel like we have found a permanent solution to any problems we have in school now and in the future.
    —Heather H.

  • Tutoring Center logo

    The Tutoring Center® has been helping our son to improve his reading skills. He likes the environment. The consistency of the program is comforting, and he is motivated by the reward system. Consequently, he usually has a positive attitude about attending, which is one of the best things about the center for us, because in the past he could be resistant to extra help.
    —Steve B.

  • Tutoring Center logo

    The free diagnostic test gave us great insight into where our daughter currently is academically and where she needs to be. The tutors work one on one with her and she can't wait to go.
    —Rachael T.

  • Tutoring Center logo

    After a couple months of attending tutoring her report card was all A's and she had increased 3 reading levels! We couldn't be happier and more impressed!
    —Jamie M.

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Now with over 120 locations in 23 states, The Tutoring Center® continues to grow as we fulfill our mission to empower children to reach their potential.

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Franchisor Headquarters
4300 Long Beach Blvd., Suite 510
Long Beach, CA 90807

The Tutoring Center® Franchises are available to qualified prospective franchisees only in certain states. The Tutoring Center Franchise Corp. will not offer or sell a franchise unless registered (or exempt) in the state where the prospective buyer resides or where the franchise will be located. This information is not being directed to any resident of the following states: North Dakota, Maryland, Rhode Island, South Dakota, or Virginia, or any province, country or jurisdiction where the Tutoring Center Franchise Corp. is not currently registered to offer or sell, unless otherwise qualified or exempt. This advertisement is not an offering in the State of New York. An offering can only be made by a prospectus filed first with the department of law of the state of New York. Such filing does not constitute approval by the department of law. The information on this website is not an offer to sell, or a solicitation of an offer to buy a The Tutoring Center® Franchise. An offer to sell a The Tutoring Center® Franchise is made by Franchise Disclosure Document only unless an exemption applies.