Roller Rinks, Inc. (RRI) grants a franchise to Sven to operate an RRI rink. RRI may require Sven to pay a percentage of his

Question

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RRI may require Sven to pay a percentage of his annual sales or annual volume of business. This gives RRI flexibility in terms of calculating the franchise fee based on whichever parameter works best for their business model. It also ensures that Sven pays a fair fee based on the level of business he is generating.