Service royalty
The service royalty is the periodic amount paid by the franchisee to the franchisor in exchange for ongoing services — field support, training, tools, and group purchasing. It is distinct from the entry fee and the advertising royalty.
In practice
In most French franchise agreements, the service royalty represents between 3% and 8% of net revenue. Its economic justification must be transparent: the DIP disclosure document details the services included and their estimated value. A franchisee who disputes the level of service received can invoke this gap to request a revision or termination at the franchisor’s fault. The strongest networks publish an annual account of how royalties are spent.