The Hidden Economics of Franchise Royalty Fees

Franchise Conversations with Fexingo: Buying, Running, and Scaling Franchise Businesses · May 24, 2026 · 8m · transcript

Lucas and Luna dissect the royalty fee structure that underpins every franchise system. Using the case of a mid-size quick-service burger brand charging 6 percent of gross sales, they walk through what that percentage actually buys a franchisee — from national marketing funds to supply chain leverage to ongoing R&D. They contrast this with emerging flat-fee models and tiered royalty structures, asking whether the industry standard is still fair in 2026. The episode also touches on a recent shift at a well-known fitness franchise that swapped its 7 percent royalty for a flat $1,500 monthly…