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larisa86 [58]
3 years ago
5

Ivy is investing in a home cleaning franchise called HomeKeepers. At her first interview with the franchisor's selling agent, sh

e was told the parent company expects 5% royalties. What are royalties?
Business
1 answer:
evablogger [386]3 years ago
4 0

Answer:

A royalty is a fee that the franchisee has to pay the franchiser for trading under its name.

Explanation:

A franchise operation is when one party (franchiser) allows another party (franchisee) access to it’s proprietary knowledge, trademark and processes in order to allow the party to sell a product or provide a service under the business’s name. A common example of a franchise operation are KFC outlets across the globe.

A royalty fee is a fee that the franchisee has to pay the franchiser on a common basis such as quarterly or annually for trading under its name. It is generally calculated as a percentage of gross sales. In this case the royalty fee would be 5% of gross sales.

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4 years ago
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