Franchise fees eat store profits
Peachwave's no royalty, no marketing, and no initial franchise fees model can greatly help improve store profitability and faster return-on-investment because Peachwave store owners retain 100% of their profit. Imagine what you can do with more retained profit when you don't have to pay royalties, marketing fees, or franchise fees.
Franchise fees as a % of profit = (Annual Gross Sales x Royalty and Marketing Fee %) / EBITDA before Royalty and Marketing Fees
Franchise fee $'s used for calculations in this illustration are based on a hypothetical store that has annual gross sales of $400,000 and therefore associated royalty and marketing fees between $20,000 and $32,000 per year (5% to 8% fees respectively).
*For illustrative purposes only, $80,000 earnings before taxes, interest, depreciation, and franchise fees is hypothetical and is not indicative of the actual EBITDA representations made by any particular brand.
