Typical Franchise Royalties

typical franchise royalties

Franchise Opportunities Many Don’t Know About

One of the most common question I am always asked is “What’s Hottest business out there?”  The reason people ask that, is because everybody wants to be on board when the next “Best Thing” comes out.  Today, I am going to tell you how to be the first to bring the “Next Best Thing” to your area, your city or your country.  There are two opportunities available with Franchises that most people do not know about: Master Franchisee and Area Developers. 

Area Developers:
An Area Developer purchases an exclusive territory and makes a commitment to the Franchise that he/she will open X amount of units in X amount of time.  Here are several advantages:


  • Exclusive Territory means no one else will ever own that concept in your area.  Imagine being the only person in your area who owns the “Next Best Thing”  As the “Name” gains popularity, so does the value of your business.
  • Most Franchises offer discounts on Franchise Fees to Area Developers
  • Multiple locations maybe cheaper to operate, because you can divide the expenses between several locations.
  • Your primary function is a CEO and CFO of your company.


Master Franchisee:
A Master Franchisee purchases an exclusive territory and makes a commitment to the Franchise that he/she will find, assist, support new Franchisees in that specific area.  Basically, a Master Franchisee becomes a Franchisors mini corporate office.  Here are several advantages:


  • For every new location a Master opens, the Franchise will typically pay him/her 1/2 of the Franchise Fee and then typically 1/2 of all the royalties collected.
  • Master can develop and area using other people’s money and time.
  • Residual income…As long as you maintain your Master Status, you will continue to get the percent of royalties from every location you open for as long as they are in business.


The biggest concern and fear that people have about bringing a new concept to an area, is the fact that no one has heard about it, but isn’t that the idea? to be the first?
Both concepts require a much larger investment than a single business, however most millionaires did not become rich from one location, so THINK BIG.

About the Author

Franchise Advisory Group is a leading business brokerage firm located in Philadelphia that specializes in the sales of Franchises and business merger and acquisitions. Our experience and expertise make us an invaluable partner to have on your side when buying or selling a business.

Franchise Advisory Group is a professional organization whose top priority is client service; we are firmly committed to confidentiality, integrity and excellence.

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