From time to time, a franchisee may ask, “What do you do to earn your 5% franchise fee?”

It’s a common misconception that a franchisor must “earn” the franchise fee by exchanging time and effort equal to the amount paid. In reality, the franchise fee is a royalty paid for the right to use a proven business format, systems, processes, brand, and intellectual property that have been developed over many years. Some franchisors provide minimal ongoing support yet charge royalties of 7–10%.

It is also worth noting that, unlike many franchise systems, Kiwikrane does not operate a marketing fund. In other franchise models, marketing funds can lack transparency or accountability in how they are spent.

The Kiwikrane franchise model is built on strong alignment between franchisor and franchisees. The Support Office provides both direct and indirect support across multiple areas, including:

Prizes & Product Support

• Holding a wide range of stock available for immediate supply to franchisees (minimum $1,000,000 wholesale stock held)

• Maintaining an online franchisee shop for convenience

• Offering credit accounts (where approved)

• Accepting returns on selected stock (handling fee applies – refer to Returns Policy)

• Holding direct licences with sporting bodies, including minimum guarantee commitments

• Ordering to align with major movie releases

• Testing and advising on prize sizes for different machine types

• Ongoing research and development of prize ranges

• Providing videos and information on new stock releases

Marketing & Site Development

• Creating and maintaining siting and proposal materials

• Managing relationships with national site partners, including administration and payments

• Assisting with personalised proposals to sites

• Supporting franchisees who wish to sell their franchise area

Business Support

• Maintaining a comprehensive online operations manual

• Providing route management software

• Running a private Facebook communication and information group

• Supplying individual quarterly performance statistics and benchmarking

• Providing a franchise structure that enables new buyers to purchase from exiting franchisees

• Phone-based business support

Technical Support

• Providing both office-hours and after-hours technical support

• Maintaining over $100,000 in parts inventory

• Providing videos and technical instructions via the manual and Facebook group

• Supporting new franchisees purchasing from departing franchisees

Miscellaneous Support

• Maintaining an inventory of machines available for purchase

• Assisting struggling franchisees to exit with as much value preserved as possible

• Providing access to uniforms and business cards

• Group public liability insurance

• Coordinating supplier relationships under a franchise system model that delivers financial benefits to franchisees

Sales & Succession

• Assisting with business valuation

• Supporting franchise sales and purchaser due diligence

• Ensuring smooth transitions when franchise areas are sold

• Maintaining a strong franchise reputation so businesses retain value

• Giving incoming franchisees confidence to purchase, enabling smooth handovers

Any franchisee questioning the value of the franchise fee is encouraged to consider whether the support, systems, buying power, brand value, and infrastructure provided represent value greater than 5% of their revenue.

If concerns remain, we welcome open and constructive discussion with the Support Office.