Fees & payments

Renewal fee

A fee payable when a franchisee renews or extends the franchise agreement at the end of its term.

What it means

Franchise agreements run for a fixed term, often five to seven years. Renewing for a further term can attract a renewal fee, and sometimes a requirement to refit the premises to current brand standards.

The renewal fee, and any refit obligation, materially affect the long-run economics of a franchise, because they land again each time you renew.

In practice

Before signing, find the renewal fee and any refurbishment obligation in the agreement, and factor them into your long-term model, not just the first term.

A real example

At the end of her five-year term, a franchisee pays a $10,000 renewal fee and is required to refresh the fit-out, a combined cost she had planned for because it was disclosed up front.

Renewal fee, FAQs

Do I pay a fee to renew a franchise?

Often yes. Many agreements charge a renewal fee at the end of the term, and may require a refit to current brand standards. Both should be disclosed before you sign.

Is renewal automatic?

Not always. Renewal usually depends on meeting conditions and giving notice. The Code provides notice-period protections, but renewal is not guaranteed, check your agreement.

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