Question

In his search for a franchised business that would satisfy his passion for the outdoors and earn him a decent living, Andrew noted that the shared profit criterion required of franchisors had significant variance. Some required franchisees to pay 7% of their monthly revenues to the franchisor. Others required 4% of the profits. In business we refer to this obligation as a ______________.

a. franchise fee
b. royalty fee
c. market fee
d. penalty fee

Answer 1

The correct answer is b. royalty fee

Step-by-step explanation:

The royalty concept has different uses. The most common refers to the money obtained by the owner of a right when someone makes use of it. This means that when a person exploits some rights of another, they must pay royalties.

Some products and techniques are protected from the imposition of royalty payments for those who wish to follow the standards that characterize them. Such is the case of connections and USB ports: when a manufacturer wishes to include this technology in its products, it must not pay its creators.

Copyright is the most frequent case of royalty generation. The composer who has registered a certain song of his authorship charges royalties every time someone performs in public or records his song. For example: Mick Jagger and Keith Richards get royalties with all the versions that other artists record of "(I can't get no) Satisfaction."