What ongoing payments does the local owner pay to the franchise company?

What ongoing payments does the local owner pay to the franchise company?

• A. Dividend
• B. Royalty Fees
• C. Share of Stock
• D. Trademark

Answer: (B)

Royalties are the ongoing payments a franchisee makes to the franchisor for the continued right to use the brand, business system, and support. They’re usually a percentage of sales or a regular fee, sometimes with an additional amount for marketing. This distinguishes them from dividends (payments to shareholders), share of stock (ownership in the company), or a trademark license alone (which might be a separate or one-time charge). In most franchise agreements, the ongoing obligation tied to using the brand and system is called royalties.

Royalties are the ongoing payments a franchisee makes to the franchisor for the continued right to use the brand, business system, and support. They’re usually a percentage of sales or a regular fee, sometimes with an additional amount for marketing. This distinguishes them from dividends (payments to shareholders), share of stock (ownership in the company), or a trademark license alone (which might be a separate or one-time charge). In most franchise agreements, the ongoing obligation tied to using the brand and system is called royalties.