A franchise fee is a standard fee when buying a franchise. It encompasses both initial fees paid upfront to the franchisor and ongoing fees that franchisees are required to pay throughout their franchise ownership. The initial fees may include the initial franchise fee, which grants the franchisee the right to use the franchisor’s brand name, trademarks, and business model. Additionally, franchisees may need to cover costs for necessary licenses and permits to legally operate and may seek legal advice, leading to attorney fees. Ongoing fees consist of a royalty fee, which is typically a percentage of the franchisee’s gross sales. Some franchisors may also charge a system brand fee for marketing and advertising efforts at a national or regional level, while others may have infrastructure fees to cover technology or software usage. Franchisees could also be responsible for insurance premiums, industry dues, and term renewal fees to maintain their franchise agreement. It is critical that potential franchisees carefully review all costs and benefits detailed in the franchise disclosure document and seek professional advice to make informed decisions before entering into any franchise agreement. This preparation ensures they can embark on a successful and profitable franchise venture.