What a Franchise Takes From Gross Revenue

Window Gang's amended 2026 Franchise Disclosure Document lists a 6% royalty, a 2% marketing-fund contribution, a 2% contact-center fee with weekly minimums, $210 per week for technology, $85 per week for accounting, and local advertising equal to the greater of $5,000 per month or 10% of monthly gross sales. At $350,000 of evenly distributed annual sales, the post-year-one listed stack is $114,780: $54,780 in listed fees and services plus $60,000 in required local advertising.

That is 32.8% of gross revenue. The $60,000 local-advertising requirement is owner-spent marketing that the FDD requires. The first-year stack is $110,771, or 31.7%, because the contact-center minimum phases in during year one.

The comparison runs one $350,000 service business through each model. Ordinary operating costs are $210,000 before marketing or program charges: $133,000 for direct labor and field execution, $42,000 for equipment, vehicles, materials, and insurance, and $35,000 for administration and overhead. That 60% cost base leaves $140,000 before marketing and the franchise or SkyPSI relationship.

The Window Gang model then applies $114,780 in disclosed fees, services, and mandatory local advertising, leaving $25,220. A SkyPSI Operator controls a $35,000 local-marketing budget and pays a fixed $36,000 annual subscription, leaving $69,000. The fixed-fee model leaves $43,780 more, or about 2.7 times as much operating cash, before owner compensation, debt service, and taxes.

Revenue is the money a customer pays. Profit is what remains after the business earns that revenue and pays every cost required to deliver the work. A percentage-of-gross royalty sits between those two numbers. It gets paid before the owner knows whether the job produced a healthy margin, a thin margin, or a loss.

The Federal Trade Commission says franchise royalties may be charged on gross income and remain owed while the franchisee loses money. At $350,000, an 8% royalty alone is $28,000. Brand funds, required local marketing, technology, call-center, accounting, debt, and every ordinary operating cost come after or alongside it.

The franchisor receives a contractual share of the upside during the agreement term. The local owner absorbs the payroll, equipment failure, bad debt, rework, insurance claim, and operating loss behind the sale.

The 2026 disclosure documents for Fish Window Cleaning, Rolling Suds, and Window Gang show the same basic structure in different forms: pay to enter, share gross revenue, fund marketing, use required systems, accept operating controls, and keep paying ordinary business costs locally.

At $350,000 in evenly distributed first-year gross revenue, the disclosed royalty and recurring requirements produce roughly $54,700 for a small-package Fish business, $84,344 for a one-territory Rolling Suds business with one service vehicle and its three-month opening-ad requirement, and $110,771 for Window Gang. Required local marketing counts as mandatory cash outflow, whether the money goes to the franchisor or to local media.

A franchise can provide a brand, training, systems, software, vendors, a contact center, and advice. Local demand comes from local selling. The FTC asks buyers whether the name is strong enough to bring customers or whether the franchisee has to create the market. Rolling Suds requires franchisees to fund their own local marketing.

The local owner sells, staffs, executes, fixes mistakes, collects invoices, and carries the risk. Brand funds, contact centers, and royalties are costs on top of that work.

• Initial franchise fee: the admission price, commonly non-refundable.
• Royalty: a recurring percentage of gross sales, sometimes with a minimum payment.
• Brand or marketing fund: required contributions controlled under the agreement.
• Local marketing minimum: money the owner must spend whether or not leads convert.
• Technology, contact-center, accounting, training, audit, renewal, and transfer fees: additional layers beyond the headline royalty.
• Territory, vendor, pricing, service, advertising, renewal, and transfer controls: limits on how the owner can change or sell the business.

One caveat before the statistics: an Item 20 transfer can be a successful sale, and a termination, non-renewal, reacquisition, or ceased operation does not by itself prove business failure or explain why an owner left. The figures below are system-movement and survival signals, not a verdict on every individual outlet.

The broad risk is real. The U.S. Small Business Administration reports an average five-year survival rate of 49.2% for new employer establishments born from 1994 through 2022. A 2024 study following U.S. franchise and independent startups for eight years found no significant difference in survival rates between the two groups.

The named 2026 Item 20 ledgers add more specific context. Fish reported 36 openings, 24 exit-category events, and 32 transfers from 2023 through 2025. Rolling Suds reported 134 openings, zero exit-category events, and seven transfers. Window Gang reported ten openings, five exit-category events, and seven transfers.

An independent owner buys equipment, training, software, coaching, marketing, field support, and expert advice at known prices. Those dollars stay fixed while sales grow. The owner keeps the brand, customer equity, decision rights, and the upside created by better execution.

SkyPSI Operator is a fixed $3k monthly subscription. No franchise fee. No royalty. No percentage of the revenue the operator sources. The operator keeps its own brand and its own customers, and the fee stays flat as sales grow.

The economic choice is simple: pay directly for what helps, and keep control of what you build.