Flip Gymnastics & Karate,Inc.,grants a franchise to Gibby to operate a Flip gym.Flip may require Gibby to pay the franchisor a percentage of his

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It is common for franchisors to require franchisees to pay a percentage of their annual sales or volume of business as a royalty or franchise fee. This helps the franchisor earn revenue and maintain consistency among all franchise locations. The other options, such as weekly payroll expense or monthly overhead savings, do not typically factor into franchise agreements.