Forensic Cost Analysis
10-Year Franchise Royalty Drag Calculator
Franchisors charge 4% to 10% of gross revenue whether your store makes a profit or not. Model your cumulative 10-year cash outflow and compounding wealth lost.
1. Store Revenue & Royalty Terms
Annual Unit Volume from Item 19.
Item 6 mandatory technology/POS fee.
Estimated annual revenue inflation.
Return if royalty dollars were reinvested in S&P 500.
10-Year Cumulative Cash Extracted by Franchisor
$1,114,350
Year 1 Outflow: $106,750
Compounding Wealth Lost $1,632,800
Franchisor Share of Net Profit ~42.8%
💡 Forensic Takeaway
Over a standard 10-year franchise agreement, you will pay over $1.11M in mandatory corporate fees. Ensure the franchisor's brand equity generates enough extra customer volume to offset this drain.