Network fee
A term used in some contracts as a synonym for royalties, designating the periodic charge paid by the franchisee to the franchisor. Its calculation basis can be revenue, margin, or a fixed monthly amount depending on the network’s model.
In practice
A fixed-fee structure — a flat monthly amount independent of revenue — is preferred by networks whose sales are hard to audit. It benefits high-revenue franchisees and penalises lower-performing ones. A percentage-of-revenue structure is more common because it aligns incentives: when a franchisee earns less, they pay less. Some networks combine both: a guaranteed minimum plus a percentage above a defined threshold.