Michael is a franchise restaurant owner.He has which of the following costs?

Question

Quizplus · Accepted Answer

As a franchise restaurant owner, Michael has to pay a franchise fee to start and a monthly royalty as a percentage of sales to the franchisor. Additionally, he has to cover other operational costs such as rent, utilities, salaries, food, and supplies. Therefore, option A is the best choice. Option B is incorrect because franchise owners pay royalties based on their sales, not income. Option C is incorrect because franchise owners have to comply with certain standards and guidelines set by the franchisor that other restaurant owners do not have to follow. Option D is incorrect because costs cannot equal sales according to the matching principle from accounting, which states that expenses should be matched to the revenues they helped to generate.

Michael Is a Franchise Restaurant Owner