Royalty and ad-fund load

Definition

The two ongoing cuts of revenue a franchisee owes: the royalty and the marketing fund.

Why It Matters

Coverage arithmetic on a resale runs on earnings after this load and after a market salary for whoever runs the place, which is the line first-time buyers forget when a franchised unit looks cheap beside an independent. Add the required refresh too: most agreements oblige a remodel on a schedule, and a unit approaching its date carries a capital bill the seller has been deferring and you cannot.