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Find how much franchise fee did wendy earn

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Reference no: EM132943563

Problem 1: Wendy's granted a franchise to Mac where Mac will have to pay franchise fee of $5,000,000 payable in 4 equal annual installments with the first payment starting on the date of signing the contract. The franchisee was to pay 5% of gross sales of the preceding month. Should the operations of the outlet prove to be unprofitable, the franchise may be cancelled with whatever obligation owing Wendy's, in connection with the $5,000,000 franchise fee waived. If the first year of operations generated a gross sales of $1,340,000, how much franchise fee did Wendy's earn?

Reference no: EM132943563

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