The FDD section that discloses every recurring or contingent fee a franchisee will or might pay during the franchise relationship — royalties, brand fund, technology, transfer, audit, late fees, and more.
Item 6 is a required-format table that itemizes every recurring or contingent payment from franchisee to franchisor across the life of the relationship. The most prominent line is the royalty (typically 4-12% of gross revenue depending on sector). Other common entries: brand marketing fund contribution (1-4%), technology fees ($200-$500/month), transfer fees ($5,000-$10,000), renewal fees, late payment fees, and audit fees.
If a fee isn't disclosed in Item 6, the franchisor cannot legally charge it. Adding a fee mid-FDD-cycle requires a formal amendment, which is expensive and signals disorganization to candidates and regulators.
Item 6 footnotes are critical. They specify how each fee is calculated, when it's payable, and any conditions that trigger contingent fees. Vague footnotes ("franchisee may be charged additional fees as the franchisor deems appropriate") are flagged by registration-state regulators and undermine candidate trust.
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Book a 30-min strategy callThe FDD section that discloses the initial franchise fee and any other fees the franchisee pays before opening — including the amount, when each payment is due, and whether any portion is refundable.
The ongoing percentage of franchisee revenue (typically 4-12%) that the franchisee pays the franchisor for the continuing right to use the brand, technology, training, and support throughout the franchise term.
A separately-tracked franchisee contribution (typically 1-4% of gross revenue) reserved for system-level brand marketing — the franchisor's website, lead generation, national PR, and brand-building activities.
A fee paid to the franchisor when a franchisee sells their unit to a new owner — typically $5,000-$15,000 — covering the franchisor's cost of qualifying, training, and onboarding the new operator.