Franchise Royalties cover Continuous use of Brand and Goodwill,Consultation and Continued Support,Ongoing Promotion,Innovation and Technology Upgradation and last but not the least Operations with Proven Ability. IIHT Franchise being Asia's leading IT Trainng Franchise has adopted franchise business model and adheres to international standards of operation.

2. By definition, Royalty fees are ongoing fees
charged by the franchisor for the goodwill,
ongoing services and administrative purposes.
The royalty fees are charged periodically at
predefined intervals such as monthly, quarterly,
yearly and so on; depending on the franchisor.
Royalty fee is a key element that is crucial for
generating partial income for the franchisor
and the franchisor is legally entitled for same.
Franchisee pays royalty fees for the use of the
proven formulae in operations, ongoing
support and the brand name that are the core
characters of a business.

3. Further by paying royalty fees regularly, the
franchisee assures renewal of the agreement
and enjoys the benefits from the growth of the
franchises, increase in number of
centres, innovations, adoption of latest
technologies by franchisor, which are essential
for the business.

4. Continuous use of Brand and Goodwill
Consultation and Continued Support
Ongoing Promotion
Innovation and Technology Upgradation
Operations with Proven Ability
What Royalties Cover?

5. Different ways by which
various Franchisors
charge Royalty Fees
The most common one is a Fixed
Percentage on Total
Revenue/Sales, wherein franchisor
charges fixed percentage of fee on the
total revenues of the business. This is
usually ranging from 2%-20% depending
on the franchise. This could be further
split in to twice a year or more. The
annual fee under this method fluctuates
and gives benefit to the franchisee of low
payment during the years of low sales. At
the same time franchisor benefits from
higher fees during the years of greater
sales.

6. Different ways by which
various Franchisors
charge Royalty Fees
There has been a trend of many franchises
moving to Fixed Royalty Fee in the recent
times. A prefixed amount is decided upon
that, it has to be paid annually to the
franchisor. The huge benefit of Fixed
Royalty Fee is being aware of what the
exact fee is, which is usually preferred by
both parties. Franchisee, even though has
to make the fixed payment during the
years of lower revenue, alternatively has
the option of not submitting sales report
to franchisor for auditing.

7. Different ways by which
various Franchisors
charge Royalty Fees
There have been also cases of Fixed Sum
Based on Square Footage charged by the
franchisors. This method is mostly seen
adopted by food and retail chains in USA.
As the name suggest the charge of royalty
fees is based on the square footage. A
franchisee in such case can benefit from a
smaller space.

8. It is a common scenario wherein, the franchisee does not fully
understand the necessity of royalty fees as they generally pay a
purchase price called franchise fees. This onetime fee is normally
much bigger than the royalty fees. However it does not cover the
cost incurred for ongoing services delivered to the franchise, and it
is important to deduce that the royalty fee is usually charged on the
end consumer. It is easy to draw a direct relationship between the
franchisor and the consumer under the fixed percentage on total
revenue/sales method. It is important to consider the royalty fee as
the ongoing investment that any business would need, as the
franchisor mostly invests the same to strengthen the brand, in
research and development, expansion and in exploring better
opportunities. Many a time promotions such as online are also
carried on by the franchisor, cost of which cannot be directly shared
by individual franchises, costs for such is appropriated with royalty
fees. Hence it is important to pay royalty fees for the benefit of both
the franchisee and the franchisor.

9. Indian Institute of Hardware and Technology (IIHT) has adopted
franchise business model and adheres to international standards
of operation. IIHT Technologies has a high repute for its world
class delivery of services through its franchises across the Globe.
IIHT believes in knowledge sharing about all the industries it
caters to, i.e. Education, Information Technology and Franchise
Business and proffers information about the same. For more
information please visit http://www.iihttechnologies.com/.

10. Corporate Headquarters
#15,Sri Lakshmi Complex, 4th Floor, St. Marks Road, Bangalore - 560 001. India
Tel: 91 80 6160 4545 e-mail: franchise@iihttechnologies.com
web: http://www.iihttechnologies.com/