A franchised hotel generates $2,000,000 per year in gross rooms revenue.What amount of franchise fees is this hotel likely to be required to pay its franchisor on this level of rooms revenue?

Question

Quizplus · Accepted Answer

According to industry standards, franchise fees for a hotel generally range from 2% to 6% of gross rooms revenue. Therefore, on a gross rooms revenue of $2,000,000 per year, the franchise fees would fall within the range of $40,000 to $120,000. Option B falls within this range, making it the best choice.

A Franchised Hotel Generates $2,000,000 Per Year in Gross Rooms