Kelly is interested in opening an XYZ franchise. In addition to an up-front payment of $100,000, Kelly will have to pay building costs and purchase inventory and equipment. This type of expense is called
A) investment costs.
B) the initial franchise fee.
C) royalty payments.
D) marketing fees.

Question

Quizplus · Accepted Answer

Investment costs refer to the expenses associated with starting a business, such as building costs, inventory purchases, and equipment expenses. The initial franchise fee is a specific fee paid to the franchisor for the rights to use their brand, while royalty payments are ongoing fees based on the franchisee's revenue. Marketing fees may be a separate fee or included in the initial franchise fee.

Kelly Is Interested in Opening an XYZ Franchise