Franchise royalty definitionQuestion What is the standard definition of a royalty paid by a franchisee to the franchisor?
Answer The standard way of calculating the royalty fee paid by a franchisee to a franchisor is some percentage of gross sales.
In addition, if the franchisor profits by selling product, it would have to disclose that income in its offering circular (UFOC). This allows prospective franchisees to see how much of a cut this franchisor is taking. 
Brain Trust contributor:
Principal, the Bibby Group; franchise consultant and entrepreneurship counselor
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