Also known as the first licensing fee, it is a one-time fee paid by franchisees to the headquarters when they join, which includes the franchisees' right to use the trademarks and special technologies developed by the headquarters, and reflects the value of various benefits gained by franchisees by adding franchise systems. This fee varies from headquarters to headquarters. For example, Japan's "7-11"company's joining fee is 3 million yen, and "Seicomart" company is 2.5 million yen. "Yoshinoya" Company1500,000 yen; The "home market" company only has 500,000 yen.

2. security deposit.

As a guarantee for paying various expenses and debts in the future, it also has the nature of prepayments for goods provided by the headquarters to franchisees, and the number varies from company to company, such as "Seicomart" company and "home market" company, which is 2.5 million yen; Yoshinoya Company 750,000 yen. Whether the contract is returned when it is terminated is also different, depending on the contract of both parties.

3. royalties.

It is the fee charged by the headquarters for the operation guidance of the franchise stores, which is paid by the franchise stores on schedule. The calculation method of royalty varies according to different industries, such as convenience stores generally account for 30%-50% of gross profit, fast food restaurants generally account for 5%-10% of sales, and the rental industry accounts for 6%-8% of rental income; The tavern is charged according to the store area, and there is a fixed package fee.

4. liquidated damages.

In case of violation of the obligations and prohibitions stipulated in the contract, the injured party shall pay liquidated damages as compensation according to the provisions of the contract.

5. Other expenses.

Such as shop design and construction fees, training fees, advertising fees, equipment rental fees, financial business fees, accident insurance fees, etc.

The above fees can be divided into two categories: the pre-joining fee paid before the opening of the franchise store and the follow-up joining fee paid after the opening operation. Pre-joining expenses include all the expenses of recruitment, evaluation, training, address search, etc. In some cases, it also includes the franchise fees increased by the maturity of the franchise system and the improvement of goodwill. How to determine the initial fee level, some people think that the initial fee should be reduced as much as possible so that the start-up fee of the franchisee can be minimized; Others think it should be set higher, because the upfront expenses are an important source of income for the headquarters, so that the headquarters can immediately get a lot of cash income and profits, and solve the problems faced by business operations. In fact, franchising, like other businesses, needs a certain period of development to start making profits. This period is about 3-5 years, and the headquarters must prepare enough funds to maintain the operation before making profits. Therefore, it is unrealistic to solve the financial difficulties of the headquarters through joining fees in a short time. In general, the initial franchise fee accounts for 5%-10% of the total investment of franchisees. For example, if the investment for opening a franchise store is 500,000-600,000 yuan, the initial franchise fee is between 25,000-60,000 yuan. Of course, for those franchise headquarters with high prestige and high profits, this fee may be higher than 5%-/kloc-0.

Follow-up franchise fees must be paid every certain period after franchisees start business, some of which are paid monthly and some are paid annually. It includes the management service fees and advertising fees of the headquarters for franchisees, and is generally based on the percentage of the income, and some of them determine a fixed fee. Although the fixed fee can keep the income level of the headquarters from falling, if inflation and future development are taken into account, this method still has great disadvantages, and franchisees are unwilling to accept it because they are not sure about their future business performance and are worried that the profits they get will be less than the franchise fees. However, it is easier for both parties to accept the commission based on the percentage of income. The franchisee knows exactly how much he should pay and how to calculate this amount, and he pays on the basis of income, so he has no worries. In addition, the income of the headquarters is directly linked to the performance of the franchise store, so he will spare no effort to give full support. The headquarters can also benefit from the business development of franchisees and avoid the influence of inflation.

The main reference for analyzing whether the subsequent franchise fee is reasonable is the profitability of the franchise stores, and how much profit a franchise store can earn in one year is the most important factor. Because different industries have different risks, different headquarters also have different joining risks, here we can only use one of the most common risk levels to analyze. At present, the total investment in joining a franchise store in Hong Kong is about HK$ 550,000 ~ HK$ 600,000. In mainland China, the total investment in opening a franchise store is generally around RMB 500,000. Of course, this only includes the initial franchise fee, not including the subsequent franchise fee. How to judge whether the joining fee is reasonable? According to the current economic situation in China, it is reasonable for the retail industry to have a return on investment of around 30%, so that we can calculate the reasonable annual return on investment and then calculate the profit. The calculation formula is as follows:

Total investment x 30% = annual investment return amount = annual expected profit+franchise fee.

Namely: initial fee = total investment x 30%-expected annual profit.

According to the above formula, we can calculate the reasonable joining fee on the basis of different total investment and different profit levels. Similarly, we can also calculate the expected profit level of investors on the basis of determining the joining fee.

When analyzing whether the joining fee is reasonable, we only consider the profit factors that franchisees can get. In fact, the level of joining fees is influenced by many factors, besides the profit factor, there are the following aspects:

1.The development stage of joining the headquarters.

When the franchise business of the headquarters is still in the initial exploratory stage, its franchise concept has not been fully and thoroughly tested by the market, and the business risk is high, in order to attract more investors and expand its influence, the headquarters often sells the franchise at a low price. When the headquarters business is mature and has a high reputation and a considerable number of franchisees, franchisees will often be strictly selected at this time, and the franchise fee will also rise. In recent years, the franchise fees of some popular franchises in Hong Kong have soared precisely because they have entered a mature stage.

2. Join the assistance provided by the headquarters.

The amount of assistance provided by the franchise headquarters to the franchise stores is an important factor to determine the level of the franchise fees, because the more assistance provided, the more the management expenses, and the franchise fees charged to make up for the management expenses also increase accordingly. For example, in Japan's "7-11"convenience store, apart from providing common assistance, unlike other headquarters, it also provides all the equipment needed by the franchise stores, and franchisees do not have to bear the investment in this area. In addition, it also provides regular inventory service, bookkeeping accounting service, financing service, etc., and its franchise fee is generally higher than other headquarters.

3. Join the management level of the headquarters.

Although the level of joining fees has a great relationship with the management level of the headquarters, it is difficult for outsiders to accurately evaluate the management level of the company at a glance. The characteristics of all walks of life and the theories of various factions, coupled with various manifestations, make outsiders only pay attention to form and can't see the essence clearly. When conducting franchise business, the headquarters should not only upgrade its management quality, but also pay attention to the external packaging of management quality, strive for perfection, and even print well a brochure and business card for promotion, so as not to be shoddy and damage the company's image.

4. Join the promotion activities carried out by the headquarters.

The expenses of various publicity and promotion activities carried out by the headquarters are often borne by the franchisees and included in the franchise fee, so the franchise fee is proportional to the frequency of promotion activities carried out by the headquarters, but it is not necessarily proportional to the promotion effect. The headquarters can't charge as much as it wants to advertise, but must promote it in a planned way and pay attention to the promotion effect.