Fees & payments

Ongoing fees

Ongoing fees are the recurring payments a franchisee makes to the franchisor throughout the term of the agreement, most commonly the royalty and the marketing levy, plus any other periodic charges for services, systems or supplies.

What it means

Ongoing fees are what you keep paying to remain part of the network, as distinct from the one-off initial franchise fee. The two largest are usually the royalty (for the right to use the system) and the marketing levy (for pooled advertising).

Beyond those, agreements may add recurring charges such as technology or point-of-sale fees, software licences, training-update fees, and margins built into goods you must buy from the franchisor or nominated suppliers. Each of these reduces the money left at outlet level.

Every ongoing fee, how it is calculated and when it falls due must be set out in the disclosure document and franchise agreement under the Franchising Code of Conduct 2025, so you can total them before committing.

In practice

When comparing brands, add up all ongoing fees as a combined percentage of sales rather than judging on the royalty alone. A low royalty can be offset by a high marketing levy, technology fees and supply markups.

Model ongoing fees against realistic turnover to see what proportion of gross sales leaves the business before you pay rent, wages and stock. This is central to understanding an outlet's unit economics.

A real example

A franchisee pays a 6% royalty, a 2.5% marketing levy and a fixed $250 per week technology fee. On $500,000 of annual gross sales that is roughly $30,000 in royalties, $12,500 in levy and $13,000 in technology fees, so about $55,500, or over 11% of sales, goes to the franchisor before rent, wages and cost of goods.

Ongoing fees — FAQs

What counts as an ongoing fee?

Any recurring payment to the franchisor during the term, typically the royalty and marketing levy, plus technology, software, training-update or supply-margin charges set out in the agreement.

Are ongoing fees fixed or variable?

It depends on the fee. Percentage-based fees such as royalties move with your sales, while others are flat periodic amounts. Both types should be disclosed before you sign.

Why look at total ongoing fees, not just the royalty?

Because a low royalty can be offset by a high levy, technology charges and supply markups. Only the combined figure shows how much of your sales actually leaves the business.

Where are ongoing fees disclosed?

In the disclosure document and franchise agreement under the Franchising Code of Conduct 2025, which must state the amount, basis of calculation and timing of each fee.

See the full franchise glossary, the Fee Index or our buyer guides.