Franchise Royalty

This is a percentage of your gross sales (not profits) usually paid monthly or quarterly to the franchisor. There is often a minimum amount due even if you're having a slow period. However you can ask to have a no-fee-due clause in your agreement(before you sign it) to protect you if your are temporarily closed due to weather, fire or another disaster.

Compare the royalty percentage to others in the industry to be sure it's in line with them. There should be a 5 to 10 day grace period without a late penalty for making these royalty payments. Some franchisors may offer or require automatic withdrawals from your bank account so don't forget to pay them. The franchisor wants you to be as successful as possible which increases their royalty amount.
More on franchise info and facts in chapter 3 of my new book "90 Days to Success as a Small Business Owner" available at www.amazon.com (for signed copies call 719-268-1322)