Death, Taxes, and Royalties Part 1 Royalties

Franchisees,

Please pay your royalties to your franchisor. I don't know how strict other companies are about collecting their royalties and at what point they send your delinquent butt to collections, but the fact is that they shouldn't have to.

I shouldn't have to call you and talk you in to, or threaten you to pay your royalty fees. The fact is, it's not your money. You have just started thinking it is your money, and that you can use the money for other things. Once again, ITS NOT YOUR MONEY.

When you bought the franchise, actually you didn't buy anything. You were licensed to do business as....... Anyway, you signed a contract agreeing to pass along the % of sales royalty fees for the right to use the name, brand, operating procedures, etc.

Think of royalties as taxes. You never say, wow I took in $2,000 last month in taxes that I can spend on a new car, boat, marketing, or anything else. You don't get excited about tax money that was collected because you know you have to just pass it along to the state, county, and city.
You know it isn't yours to spend, and you know if you don't pass it on, a day of reckoning will come. You can't tell the IRS that you haven't sent your quarterly money in because your car broke down and you need to hire another employee. You can tell them, but it won't matter.

Start looking at whatever % you pay in royalty fees as taxes. This will help you when you are tempted to spend it instead of passing it on.

Fran