Typically, a franchisor sells the right to a franchise for an initial flat fee called the "franchise fee". This fee is in addition to the actual costs associated with opening a franchise unit in one's local market. Then, the franchisor will often receive ongoing payments, such as royalty fees, taken as a percentage of sales. Many franchisors will also sell supplies and/ or services to their franchises.

Source: Business for Sales, Jul/Aug 2008's version, p. 13