Tumble Gymnastics & Karate, Inc., grants a franchise to Stefan to operate a Tumble gym.Tumble may require Stefan to pay the franchisor a percentage of the business's

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It is common for franchisors to require their franchisees to pay a percentage of the business's annual sales or volume as a part of their franchise agreement. This fee is usually referred to as a royalty fee and is paid to the franchisor for the rights to use their brand name, trademarks, and systems. It helps the franchisor to make a profit from the franchise system and invest in the brand's growth and development.