Which of the Following Statement Is Not Correct Regarding the Costs

question 12

Multiple Choice

Which of the following statement is not correct regarding the costs associated with purchasing a franchise?

• A) The franchisee typically pays a royalty based on a percentage of weekly or monthly net income.
• B) Capital costs vary by franchisor, but may include the cost of buying land and building a building.
• C) Additional fees may be charged for activities such as training staff, providing management expertise when needed, and providing computer assistance.
• D) Franchisees are often required to pay into a national or regional advertising fund.
• E) The initial franchise fee varies, depending on the franchisor.

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Definitions:

Average Amount

A measure obtained by dividing the sum of a set of values by the number of values in the set, often used in financial analysis.

Average Daily Receipts

Represents the average amount of gross income or revenue that a business receives on a daily basis, typically calculated over a set period.

Collection Delay

The time period between when a check is deposited and when the funds become available in the account, affecting cash flow management.

Customers

Individuals or organizations that purchase goods or services from a business.