The franchisee pays the franchisor a share of profits or a percentage commission on sales, known as a royalty.

Question

Quizplus · Accepted Answer

This statement is true. A franchisee typically pays a royalty fee to the franchisor as part of the franchise agreement. The royalty fee is usually a percentage of the franchisee's sales or profits, and it is paid to the franchisor for the right to use the franchise brand and business model.

The Franchisee Pays the Franchisor a Share of Profits or a Percentage