Royalties · marketing fund · fee stack
Franchise Royalty Calculator
Estimate annual royalty and marketing fund cost at different coffee franchise revenue levels.
Fee Assumptions
Annual fee stack
$111,180
10.9% of revenue · $9,265/mo
- Annual royalty
- $60,180
- Annual marketing fund
- $51,000
- 5-year fee total
- $555,900
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Frequently Asked Questions
What is a typical coffee franchise royalty fee?
Most coffee franchises charge about 5–6% of gross sales in royalties, plus a marketing or brand fund of roughly 1.5–5%. Combined ongoing fees often land near 7–11% of revenue depending on the brand.
Are marketing fees the same as royalties?
No. Royalties usually fund franchisor operations and support; marketing fees fund national or regional advertising. Both reduce owner cash flow and should be modeled together.
How do royalties affect coffee franchise profit margins?
A 5.5% royalty on $750K revenue is about $41K per year before marketing. That fee stack is a primary reason franchise net margins can trail well-run independents even when AUV is higher.
Should I compare brands on royalty rate alone?
No. A lower royalty with weaker AUV or higher CapEx can underperform a slightly higher royalty with stronger throughput and support. Underwrite after-fee cash flow and payback.
Royalty and marketing fees permanently reduce coffee franchise cash flow. This calculator shows the annual fee stack so you can underwrite brands before comparing AUVs.
- Annual Royalty = Revenue × Royalty %
- Marketing Fund = Revenue × Marketing %
- Typical coffee franchise royalty: 5–6%; marketing: 1.5–5%
Built for coffee franchise buyers comparing Dunkin', Dutch Bros, Scooter's, 7 Brew, and similar systems.