Latest / Franchise Conversations with Fexingo: Buying, Running, and Scaling Franchise Businesses
Why Franchisors Are Using Revenue-Based Royalties
In Episode 64 of Franchise Conversations with Fexingo, Lucas and Luna explore the shift from traditional flat-percentage royalties to revenue-based sliding-scale royalty models. They focus on how emerging franchise brands like The Human Bean and smaller QSR chains are restructuring royalty fees to reduce franchisee turnover and align incentives. Lucas breaks down the math: a 6% flat royalty versus a 4% to 8% sliding scale tied to top-line revenue thresholds. They discuss why this model rewards high-performing units, protects struggling franchisees during slow periods, and leads to stronger…
The skinny
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