Marketing fee in franchising: how the marketing fund works

By Gijs Bodenstaff · Updated: 2026-10-04

The marketing fee is the contribution a franchisee pays to the franchisor at regular intervals for joint marketing. The money goes into a marketing fund and is spent on national and local marketing for the franchise brand. How high the fee is and what it is spent on is set out in the franchise agreement or the operations manual.

What forms of marketing contribution are there?

Franchise brands use different bases. Each form has advantages and disadvantages for both the franchisee and the franchisor.

Forms of marketing fee
Form	Advantage	Disadvantage
Percentage of revenue	Grows with success	Small locations contribute little
Fixed amount per month	Predictable	A burden for new locations
Combination of fixed + percentage	Balanced	Harder to explain
Contribution per campaign	Flexible	No continuity

How do you account for the marketing fee to franchisees?

Disputes about the marketing fee almost always arise from a lack of insight. A franchisee pays but does not see what happens locally. The solution is transparency: an annual plan in advance, a report per location and an evaluation with the franchisee advisory council.

A report per location shows how many views, direction requests, phone calls and reviews the marketing has generated. We produce a report like this as standard; see insight into offline revenue.

What franchisees want to know about the fee
Question	How to answer it
Where does my money go?	Annual plan with budget allocation
What does it deliver for me?	Monthly report per location
Who decides how it is spent?	Agreements with the franchisee advisory council
Does every location get the same amount?	A clear allocation key

What does the law say about the marketing contribution?

Since 1 January 2021, the Dutch Franchise Act (Book 7 of the Dutch Civil Code, Title 16) has applied in the Netherlands. Among other things, it requires the franchisor to provide information in advance about the fees the franchisee pays. Have the precise arrangements for the marketing fund reviewed by a franchise lawyer; this article is not legal advice.

What should you sensibly spend the marketing fund on?

A marketing fund is not a kitty for whatever happens to come along. We advise dividing the fund across fixed components that benefit every location, supplemented by campaigns for the brand. That way every franchisee can see that their contribution also has a local effect.

Example of how the fund is spent
Item	Benefit for the location	Measurable through
Google Business Profile management	Visible in Maps	Views and actions per location
Review management	Better reputation	Score and response time
Location pages	Ranking for the town name	Visitors per page
National brand campaign	Brand awareness	Brand searches
Local campaigns	Extra visits during promotions	Cost per lead or visit

How do you communicate with franchisees about the fee?

Communication is half the work. Present the annual plan at the franchisee day, share the results with the franchisee advisory council every quarter and give each franchisee their own figures every month. Explain why certain choices were made, even if one location receives less budget than another. Openness prevents the feeling that the fee disappears into a black hole.

Do you notice that franchisees want to add their own money for local promotions? That is a good sign. Give them a simple route for this, with templates and a fixed price, so the quality stays consistent.

How do you split the fund between national and local?

That is the most important choice. We work it out in budget split between head office and locations. As a starting point, we advise: the basics for every location (profile, reviews, page) from the fund, national brand campaigns from the fund, and additional local promotions from the franchisee's own budget. Would you like this worked out for your franchise brand? Start with marketing strategy for franchise brands.

Questions about the marketing fee in franchising: how the marketing fund works

What is a typical marketing fee?

That varies widely by sector and franchise brand. There is no legal standard. More important than the amount is that spending is transparent and visible to the franchisee.

Can the franchisor spend the marketing fund freely?

That depends on the arrangements in the franchise agreement. Have this reviewed by a lawyer; the Dutch Franchise Act sets requirements for information provided in advance.

How do you prevent disputes about the marketing fee?

With an annual plan in advance, a report per location and a regular evaluation with the franchisee advisory council.

Can the marketing fee be used to recruit new franchisees?

That depends on the arrangements, but we do not recommend it. Recruitment mainly serves the franchisor; the marketing fund is intended for marketing aimed at the customers of existing locations.

What if a location feels it gets too little back?

Show that location's figures, compare them with similar locations and discuss what extra is needed locally. The solution often lies in a better local foundation, such as a complete profile and more reviews.

What forms of marketing fee exist in franchising?

There are four common forms: a percentage of turnover, a fixed monthly amount, a combination of fixed amount and percentage, and a contribution per campaign. A percentage grows with success, a fixed amount is predictable but heavy for new locations, a combination is balanced and a per-campaign contribution is flexible but lacks continuity.

What does the Dutch Franchise Act say about the marketing contribution?

Since 1 January 2021 the Dutch Franchise Act has applied, set out in Book 7, Title 16 of the Dutch Civil Code. Among other things, it requires the franchisor to provide information in advance about the fees the franchisee pays, such as the marketing contribution. Always have the exact marketing fund arrangements checked by a franchise lawyer.

What is the most sensible way to spend a franchise marketing fund?

Divide the fund across fixed elements that benefit every location, such as managing Google Business Profiles, review management and location pages, plus national brand campaigns and local campaigns. Make each element measurable, for example with actions per location, review response time or branded searches, so franchisees can see what their contribution delivers locally.

How do you split the marketing fund between national and local marketing?

As a starting point we advise: the local basics for every location, such as profile, reviews and location page, paid from the fund; national brand campaigns also from the fund; and extra local activity from the franchisee's own budget. Give franchisees who want to add budget a simple route with templates and a fixed price.

How do you communicate with franchisees about how the marketing fee is spent?

Present the annual plan at the franchisee day, share results every quarter with the franchisee council and give each franchisee their own figures every month. Explain why choices were made, even when one location gets less budget than another. That openness prevents the feeling that the fee disappears into a black hole.

Sources

Dutch Franchise Act (Wet franchise), Dutch Civil Code Book 7, Title 16 (wetten.overheid.nl)

Gijs Bodenstaff
Franchise marketer, local SEO and GEO specialist, author

Would you rather not work this out yourself? We are happy to take it off your hands.

Get a free marketing scan Call 06 - 38 04 83 47

The marketing fee in franchising: how the marketing fund works