If you are a franchisor and you charge a royalty of 5% on revenue and you have franchisees that have revenues of $1 million, $2 million, $1.5 million, and $2.5 million, how much would you earn in royalties?

Question

Quizplus · Accepted Answer

The total revenue of the franchisees is $1 million + $2 million + $1.5 million + $2.5 million = $7 million. The royalty is 5% of revenue, so the franchisor would earn $7 million x 0.05 = $350,000 in royalties.

If You Are a Franchisor and You Charge a Royalty