Franchise Royalty Ongoing Fees: What You Pay After Opening

Most of the planning before opening goes into the opening budget: build-out ranges, equipment packages and the lease. The costs that continue afterwards are set out separately, in Item 6 of the Franchise Disclosure Document.

Ongoing franchise fees are charged on gross sales for the term of the agreement. General: because they recur, they typically total more over a ten-year term than the one-time initial franchise fee. Two kinds of money leave the business after opening. Fees are paid to the franchisor and are set out in Item 6. They are calculated on gross sales, regardless of the location's profitability that month. Operating costs are paid to landlords, staff and suppliers, and typically represent a larger share of sales. Prospective franchisees should plan for both. If you are still working out what it costs to open, our guide to what it costs to open a healthy food franchise covers that side.

What a Toastique Franchise Owner Pays

The recurring costs Toastique publishes, in one place.

Sources: Toastique's 2026 franchise overview and FAQ page, accessed July 2026. Below, figures marked Toastique come from the brand's own published materials. Figures marked general describe how franchising normally works. All figures should be confirmed against Item 6 of the FDD provided.

The Royalty: 6% of Gross Sales

General: a royalty is the recurring fee paid for the right to operate under the brand. Toastique: 6% of gross sales.

Gross is the word to watch. The fee comes off your sales, not your profit. You owe it on every dollar that crosses the counter, whether the store made money that month or not. On $600,000 in sales, 6% is $36,000. It is the same $36,000 in a strong year and a weak one.

General: food-service royalties commonly run 4–8%, while Toastique's 6% royalty is within the range commonly seen across food franchise systems. Evaluate the royalty alongside the operational support, training and resources the franchise provides.

Toastique publishes two royalty reductions. The first waives the royalty for the first three months on each restaurant opened under a 1-3, 1-4, or 1-5 multi-franchise addendum (Item 6). The second waives the first $10,000 of royalties for veterans, applied to the local marketing of their restaurant (Item 5).

Brand Fund vs Local Marketing

Marketing money moves in two directions, and the two obligations work differently.

The brand fund is money you send to the franchisor. It is pooled with contributions from other locations and spent by the franchisor on system-wide marketing; Item 11 sets out what the fund is used for. Toastique's 2026 franchise overview lists the brand fund at 0% today. The franchise agreement allows it to be charged at any rate up to 2%. It is helpful to model the brand fund at 2%, which is how Toastique's own cost example treats it.

Local marketing is spent by The Franchise Owner spends local marketing in their own market rather than remitting it to the franchisor. Toastique: the FDD requires Franchise Owners to spend at least 2% of their monthly gross sales on local marketing for their restaurant (Item 6, Note 5).

These are separate obligations and not equivalent to a single 4% marketing fee. One is remitted to the franchisor; the other is spent by the Franchise Owner in their own market.

Technology Fees

General: franchise agreements typically specify the technology a location runs, including point-of-sale, loyalty, online ordering and reporting, and the Franchise Owner funds it.

Toastique’s technology fee is $500 per month, or $6,000 a year, and the agreement caps any future increase at $750 per month (Item 6, Note 7). General: a percentage-based royalty moves with sales, while a fixed monthly fee stays the same regardless of sales.

Approved Vendors, Supplies and Food Cost

General: most franchise agreements require certain items to be bought from approved suppliers. Item 8 sets out those rules, along with any rebates the franchisor collects. Where these requirements apply, the approved supplier sets the cost of those items rather than the Franchise Owner.

Toastique: the menu runs on proprietary cold-pressed juice, granola and coffee made with small-business partners, with ingredients sourced locally and prepared in-house. The FAQ states there are ‘no fryers, hoods, ovens, or other complex restaurant equipment to worry about’ and that ‘the only major equipment expense you should expect is an X-1 Juicer.’

General: the recurring costs tied to that equipment, such as hood cleaning contracts, grease trap servicing, fryer oil and the utility load they carry, do not apply to a kitchen configured without it.

General: food cost in a café usually runs around 30% of sales. Item 19 of Toastique’s 2026 FDD shows food and paper goods at 31.9% and 31.5% of gross sales for the two company-owned outlets in 2025 (Tables 1 and 2). Food cost is assessed as a percentage of gross sales.

Labor: The Largest Recurring Line

General: Payroll is typically the highest recurring cost in a food franchise, ahead of both rent and franchisor fees.

Toastique: the recommended staffing model is ‘2 Leadership positions … and 5-10 hourly employees’ per location, with 3 to 5 people on each shift. Owner-operators should expect to work 60+ hours per week in the first year and be involved in the day-to-day operations.

Item 19 of Toastique’s 2026 FDD shows payroll and labor at 24.2% and 26.1% of gross sales for the two company-owned outlets in 2025 (Tables 1 and 2). Where a location lands depends on local wage rates, scheduling and staff turnover. Toastique: recommended operating hours are 7am to 5pm daily. Those trading hours shape the staffing schedule, since the operating day ends in the late afternoon.

Rent, Utilities, Insurance and Maintenance

These are paid to third parties rather than to Toastique. The local market and the lease set them, not the franchisor.

The planning ranges here are general figures, not Toastique disclosures. Two stores from the same brand can land in different places on them.

Renewal, Transfer and Exit

Three costs arise at the end of a franchise term.

Sources: Toastique's FAQ page and franchise materials, accessed July 2026.

General: In many franchise systems, renewal is granted on the franchisor's then-current agreement rather than the original one, so the fee percentages at renewal may differ from those first signed. Transfer terms govern the sale of the business, and franchise agreements commonly set conditions on a transfer, including franchisor approval of the buyer. Item 17 sets out the renewal and transfer terms that apply.

A Full Year of Recurring Cost

Toastique publishes a worked example of the fees you pay the franchisor. The brand presents it as ‘a simple example using common industry fee ranges’, not a forecast of what any store will earn or owe.

Toastique's published example. The brand fund is budgeted here at the full 2%, even though Toastique's materials put it at 0% today. Your own figure moves with your sales.

Two points sit behind the total. First, the $66,000 covers the franchisor fees only. Labor at roughly 30% of sales and rent at roughly 10% would come to around $240,000 on the same volume, before you pay for food, utilities or insurance.

Second, the figure scales with the sales assumption used. Toastique discloses that all operational franchise outlets open for two or more years averaged $745,577 in gross sales, with the top location at $1,122,669 (2026 Franchise Disclosure Document, Item 19, Table 10). That cohort covers established stores, not new openings. It is helpful to model the fee load at several sales levels rather than one.

What Most Fee Breakdowns Get Wrong

Three mistakes turn up often enough in published fee breakdowns to be worth naming.

• Adding fees you remit to money you spend yourself. A 2% brand fund and a 2% local marketing requirement are not a 4% marketing fee. The math works; the picture it gives you does not.
• Treating a capped fee as fixed, or as free. Quote the cap as though it were being charged and you overstate today's cost. Leave an uncharged fee out altogether, and you understate tomorrow's. The same goes for flat monthly charges, which do not fall when sales do.
• Trusting listing sites over the document. Franchise directories often disagree about a brand's fees, usually because a brand issues a new FDD every year and the sites update on their own schedules. The FDD your franchisor hands you is the only source that counts.

How to Verify These Numbers in the FDD

Every figure in this article can be confirmed against the document provided:

• Item 5, the initial franchise fee and any deposits.
• Item 6, the recurring fees: royalty, brand fund, local marketing, technology, transfer, renewal, late fees and audit charges, with when each is due and how you pay it.
• Item 7, the estimated initial investment, including any working capital the franchisor assumes.
• Item 8, approved-supplier rules and any rebates the franchisor collects.
• Item 11, what the technology fee buys, and what the brand fund pays for.
• Item 17, renewal, transfer and termination terms.

It is helpful to total Item 6 at several sales levels. Current Franchise Owners can also be asked what they pay each month. Our walkthrough of how to read a Franchise Disclosure Document covers the rest of the document.

The Bottom Line

The recurring bill runs for the whole term and is charged on gross sales rather than on results.

Toastique publishes its structure in full: a 6% royalty; a brand fund capped at 2% and currently at 0%; 2% of monthly gross sales spent on local marketing; and a $10,000 renewal fee at the ten-year mark. What those fees amount to depends on the sales they are charged against, which is why the fee schedule and Item 19 are best read together. It is helpful to model these figures at more than one sales level.