Which statement describes one typical ongoing cost in a franchise model?

• A. Lower ongoing costs
• B. Flexible royalty waivers for the first year
• C. Access to corporate training and marketing support
• D. Ongoing royalties and restricted operating freedom

Answer: (D)

In franchising, ongoing costs are the regular payments and constraints that continue after the initial startup. The typical ongoing cost is royalties that are paid on a recurring basis, usually a percentage of sales, combined with restrictions on how the business must be run—such as following brand standards, using approved suppliers, and adhering to set operating practices. This combination of ongoing money outlay and limited operational freedom is what characterizes ongoing costs in a franchise. The other options don’t fit as well: waivers for the first year aren’t ongoing costs, access to training and marketing support is a benefit, and the idea of lower ongoing costs isn’t typical in most franchise models.