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Check regular and event-based charges

The table covers fees paid to the franchisor or affiliates, or imposed or collected for third parties. The actual offer may include technology, training, audit, transfer or renewal charges as well as royalties; it does not follow that every brand charges each one.

For a percentage of gross sales, read the contractual sales definition. It may differ from cash collected or accounting revenue. Where a fee may increase, the disclosed increase formula or maximum matters too. Keep fees distinct from independent taxes.

Sources: Federal Trade Commission: Item 6: Other fees

A percentage needs a defined base

Fictional example: a 6% royalty on a contract-defined monthly sales amount of $10,000 is $600. That answers one fee line. Add the actual technology and event-based charges separately, and use their payment dates when considering cash needs.

Sources: Federal Trade Commission: Item 6: Other fees

Scope

  • This explains the selected federal disclosure item. State and territorial requirements and the terms of the particular offer remain separate.

Next step

Read each fee’s base, due event and increase terms before using the royalty percentage in the operating budget.

Sources & review notes

Federal Franchise Rule

FTC overview · Compliance Guide · Guide PDF · Current regulation

The Compliance Guide is May 2008 explanatory guidance. The current regulation and later official updates control current requirements and dollar amounts; state and territorial rules are separate.

The source records distinguish access dates from substantive review dates. Updating an explanation does not itself recheck the law.

16 CFR §436.5(f): FDD Item 6

Federal Trade Commission

Passage, dates and research notes

primary · Item 6: Other fees

all other fees that the franchisee must pay to the franchisor or its affiliates

Accessed: 2026-11-12T20:51:48.875978+00:00 · Meaning reviewed: 2026-11-12 · Next review target: 2026-12-12

Current substantive item read in full from current eCFR. This guide explains selected management implications; it is not a substitute for all prescribed disclosure text.

16 CFR §436.6: FDD preparation and records

Federal Trade Commission

Passage, dates and research notes

primary · section-436.6

Respond fully to each disclosure Item.

Accessed: 2026-11-12T20:51:48.875978+00:00 · Meaning reviewed: 2026-11-12 · Next review target: 2026-12-12

Current eCFR displayed through 2026-11-09; eCFR is authoritative but not the official legal edition.

Detailed rule records (1)
FDD Item 6: Other fees Source checked

Item 6 uses a table for fees paid to the franchisor or affiliates or imposed or collected for third parties, including amount or formula, due date and explanatory conditions. Royalties are only one line: transfers, renewals, audits, training and technology may matter.

When to check: Preparing, updating or comparing an FDD. Source review: 2026-11-12.

16 CFR §436.5(f): FDD Item 6
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