Jenna plans to invest in a cleaning service franchise called Spare Time. At her first interview with the franchisor's selling agent, she learned that the parent company expects royalties of 5%. These are:

Question

Quizplus · Accepted Answer

Royalties typically refer to a share of the profits or a percentage share of revenues (net sales) that the franchisee pays to the franchisor on an ongoing basis as part of their agreement to use the franchisor's brand name and operating system. Option A is the franchise fee, which is typically a one-time payment made by the franchisee to the franchisor to obtain the franchise license. Option B refers to the cost of supplies, which is typically a separate expense that the franchisee incurs to purchase products or services from the franchisor. Option C refers to commissions, which are typically paid as incentives to the franchisee for achieving specific targets or goals set by the franchisor. Therefore, the best choice is D.

Jenna Plans to Invest in a Cleaning Service Franchise Called