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Royalty fees are calculated as a percentage of ______.
A) gross sales
B) gross profit
C) net profit
D) pretax revenue
Gross Sales
The total sales revenue of a company before any deductions are made for returns, allowances, or discounts.
Royalty Fees
Royalty fees are payments made by one party (the licensee) to another (the licensor) for the right to use the licensor's property, typically intellectual property, under agreed terms.
Percentage
A portion, share, or rate expressed as a fraction of 100.
- Understand the monetary obligations and commitments, including fees and royalties, incumbent upon franchisees.
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Learning Objectives
- Understand the monetary obligations and commitments, including fees and royalties, incumbent upon franchisees.
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