Question

A franchise is a system of distribution in which semi-independent business owners pay ________ and ________ to a parent company in return for the right to become identified with its trademark, to sell its product or services, and often to use its business format and system.

Answer 1

Answer: fees and royalties

Explanation: In simple words, franchise system refers to the business arrangement under which one business entity gives the right to some other business entity to use its brand name for the purpose of carrying commercial activities and earning profit.

The franchiser gets the benefit of royalty and fees while the franchisee gets to get the profit.