{"ok":true,"canonical_url":"https://dealroom.so/glossary/franchise-fees","api_url":"https://dealroom.so/api/public/glossary/franchise-fees","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"franchise-fees","term":"Franchise fees","group":"Doing the deal","definition":"These are payments made to the franchisor, typically including an upfront initial fee and ongoing royalties. These are significant costs you must factor into your total project costs.","what_it_means":"The initial franchise fee is usually a significant upfront expense for the right to operate under the brand. Ongoing royalties (a percentage of revenue) and advertising fees will impact your cash flow post-acquisition. The SBA loan can finance the initial franchise fee.","url":"https://dealroom.so/glossary/franchise-fees","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"}],"related":[{"slug":"total-project-costs","term":"Total project costs","url":"https://dealroom.so/glossary/total-project-costs"},{"slug":"cash-flow","term":"Cash flow","url":"https://dealroom.so/glossary/cash-flow"},{"slug":"franchise","term":"Franchise","url":"https://dealroom.so/glossary/franchise"}],"related_questions":[{"question":"Can an SBA 7(a) loan be used to pay for franchise fees for a new or existing franchise?","url":"https://dealroom.so/sba-loans/basics/can-an-sba-7-a-loan-be-used-to-pay-for-franchise-fees-for-a-new-or-existing-franchise"},{"question":"Are there specific franchise fees or royalties that are ineligible for 7(a) loan financing?","url":"https://dealroom.so/sba-7a/questions/are-there-specific-franchise-fees-or-royalties-that-are-ineligible-for-7-a-loan-financing"},{"question":"Are there additional fees or costs associated with financing a franchise through an SBA 7(a) loan?","url":"https://dealroom.so/sba-7a/questions/are-there-additional-fees-or-costs-associated-with-financing-a-franchise-through-an-sba-7-"},{"question":"Besides upfront fees, are there ongoing annual fees for an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/besides-upfront-fees-are-there-ongoing-annual-fees-for-an-sba-7-a-loan"},{"question":"If I acquire a franchise, does the SBA approve the specific franchise location?","url":"https://dealroom.so/sba-7a/questions/if-i-acquire-a-franchise-does-the-sba-approve-the-specific-franchise-location"},{"question":"What if a franchise agreement is not listed on the SBA Franchise Directory?","url":"https://dealroom.so/for-lenders/questions/what-if-a-franchise-agreement-is-not-listed-on-the-sba-franchise-directory"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Franchise fees","url":"https://dealroom.so/glossary/franchise-fees","source_type":"DealRoom Data"}}