FDD Item 6: Other Fees
By Scott Engler · Averan Advisors · Updated 3 October 2026
Item 6 of the Franchise Disclosure Document lists every recurring or one-time fee you pay after you open. It shows the royalty, the brand fund and any minimum amounts, which decide what you pay in a slow month.
What Item 6 must show
The Franchise Disclosure Document (FDD) is the document a franchisor must give a buyer at least 14 calendar days before the buyer signs or pays anything. The Federal Trade Commission's Franchise Rule sets its 23 sections, which are called Items.
Item 6 is a table. Each row names the fee, the amount, when it is due, and notes such as who receives it and whether it can change.
Fees that often appear in Item 6
| Fee | What it usually covers |
|---|---|
| Royalty | A percentage of gross sales, often with a minimum dollar amount each month or year. |
| Brand fund or advertising fee | A percentage of sales paid into a system-wide marketing fund. |
| Local advertising requirement | An amount you must spend on marketing in your own area. |
| Technology fee | A flat monthly charge for software, booking or point-of-sale systems. |
| Transfer fee | Charged when you sell the location to a new owner. |
| Renewal fee | Charged when the agreement term ends and you sign a new one. |
| Audit, late payment and interest charges | Charged when payments are late or an audit finds underreported sales. |
Minimums decide your effective rate
When the royalty has a minimum, a location with low sales pays more than the stated percentage. A $3,000 monthly minimum on a 6% royalty equals 7.5% of sales at $40,000 a month and stops applying at $50,000 a month. Our minimum fee calculator runs your own numbers.
Common questions
Where is the royalty listed in the FDD?
In Item 6, Other Fees, along with the brand fund, technology fee and any minimum amounts.
What is a minimum royalty?
A dollar amount you pay each period when the royalty percentage of your sales comes to less than that amount.
Sources
This page is an educational summary and is not legal advice. Read the FDD itself, and have a franchise attorney review it before you sign.