Franchise Royalty Calculator
Our Franchise Royalty Calculator helps business owners and franchisees quickly estimate royalty fees based on revenue or fixed amounts. Whether you're a franchisor setting royalty rates or a franchisee calculating monthly payments, this tool ensures accurate and hassle-free financial planning.
Franchise Royalty Calculator
Calculate your franchise royalties, expenses, and net profit
Understanding Franchises & Royalty Fees
Essential knowledge for franchise owners and entrepreneurs
What Is a Franchise?
A franchise is a business model where a franchisor (brand owner) grants a franchisee (independent operator) the right to use its trademark, systems, and support in exchange for fees (initial investment + ongoing royalties).
What Are Royalty Fees?
Royalty fees are recurring payments (weekly/monthly) that franchisees pay to the franchisor. They can be structured in two ways:
1 Percentage-Based Royalty
Typically 5-20% of monthly revenue
2 Fixed Fee Royalty
Set amount regardless of revenue
Royalty Calculation Formulas
1 Percentage-Based Royalty
Royalty Fee = (Monthly Revenue × Royalty Rate) ÷ 100
Example Calculation:
- Monthly Revenue = ₹50,000
- Royalty Rate = 6%
- Royalty Fee = (50,000 × 6) ÷ 100 = ₹3,000
2 Fixed Fee Royalty
Royalty Fee = Fixed Amount
Example Calculation:
- Fixed Fee = ₹10,500/month
- Royalty Fee = ₹10,500
3 Total Expenses Calculation
Total Expenses = Royalty Fee + Marketing + Salaries + Rent + Utilities + Other Costs
4 Net Profit Calculation
Net Profit = Monthly Revenue − Total Expenses
Example Breakdown (Indian Currency)
| Category | Amount (₹) |
|---|---|
| Monthly Revenue | 2,00,000 |
| Royalty Fee (6%) | 6,000 |
| Marketing Cost | 10,000 |
| Salary Cost | 30,000 |
| Shop Rent | 15,000 |
| Electrical Bill | 8,000 |
| Other Expenses | 12,000 |
| Total Expenses | 81,000 |
| Net Profit | 1,19,000 |
Why Are Royalty Fees Important?
Franchisor Support
Funds training, marketing, and R&D
Brand Consistency
Maintains uniform customer experience
Franchise Growth
Enables network expansion
How to Use Our Calculator
Enter Monthly Revenue
Input your gross sales amount
Select Royalty Type
Choose percentage or fixed fee
Add Expenses
Include all operational costs
Get Results
Instant royalty and profit calculations
Our Calculator Features
Financial Planning for Franchisees
Our Franchise Royalty Calculator simplifies financial planning:
Forecast Expenses
Plan your monthly costs accurately
Estimate Profits
Project your potential earnings
Make Decisions
Use data to guide your choices