If you are a business owner and are considering franchising as a way to expand, let me share with you how franchising increases your topline. Once you’ve formed a franchise, you as the “franchisor” can now offer your opportunity to potential investors who will become “franchisees.” You will be able to add to your topline primarily in two ways, franchise fees and royalties. Franchise fees are charged to franchisees to enter into the franchise agreement. The fees range and are entirely decided by the franchisor. The market does ultimately decide what the franchise fees are though. Royalties are the other income stream to increase your topline. Royalties are normally a percentage of the franchisee’s gross monthly revenues. As a franchisor, you would collect that percentage from each of your unit franchises, thus adding to your topline.
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