define the word royalty fee as it relates to franchises

A royalty fee in the context of a franchise is an ongoing payment made by the franchisee to the franchisor for the ongoing right to use the franchisor's brand, business systems, and support infrastructure. This fee is usually calculated as a percentage of the franchisee's gross sales revenue and is paid on a regular basis, often monthly or quarterly. The royalty fee covers the continued use of the franchisor's intellectual property, brand reputation, and operational systems, as well as helps fund ongoing support, training, business development, and administrative services provided by the franchisor. Royalty fees differ from the initial franchise fee, which is a one-time payment made when the franchise agreement is established. Instead, royalty fees are recurring payments intended to maintain the franchisor-franchisee relationship, incentivize the franchisor to keep improving the franchise brand, and ensure that franchisees receive continuous support during the term of the franchise agreement. Typically, royalty fees range between 4% and 15% of gross sales depending on the industry and specific franchise agreement terms.