In addition to the regular monthly payment of a percentage of gross income to her franchisor, Wilma is required to submit a smaller percentage for advertising costs. She is willing to do this because
A) otherwise she will not be able to operate her franchise.
B) she will receive a discount on the cost of her inventory.
C) she will in turn be charged a lower insurance premium.
D) the franchisor can promote the business more cost-efficiently than Wilma can on her own.

Question

Quizplus · Accepted Answer

The reason Wilma is willing to submit a smaller percentage for advertising costs is that the franchisor can promote the business more cost-efficiently than Wilma can on her own. So, option D is the only logical choice.

In Addition to the Regular Monthly Payment of a Percentage