Mcdonalds Franchise fee 45000 Fee Start up Costs 48900015

Mcdonalds -

Franchise fee = $45,000

Fee Start up Costs = $489,000-$1.5 million

Royalty Fee = 12.5%

Arby\'s -

Franchise fee = $25,000- $37,500

Fee Start up Costs = $333,000-$2 million

Royalty Fee = 4%

General Nutrition Inc-

Franchise fee = $30,000

Fee Start up Costs = $132,000-$182,000

Royalty Fee = 6%

Tastee-Freez-

Franchise fee = $5,000

Fee Start up Costs = $39,000

Royalty Fee = 4%

Question: For each franchise, calculate how much you would owe the franchiser in royalties if you made $1 million in sales.

Solution

McDonalds

Royalty fee to be paid = 12.5% of $1,000,000 = $125,000

Arby\'s -

Royalty fee to be paid = 4% of $1,000,000 = $40,000

General Nutrition Inc.

Royalty fee to be paid = 6% of $1,000,000 = $60,000

Tastee Freez

Royalty fee to be paid = 4% of $1,000,000 = $40,000