Paying Royalties is Not Always a Disadvantage in Business Gone are the days when people would be satisfied with one job and its income. Nowadays, people are always looking for options to earn extra and it is not really their fault considering the fact that living has become so expensive all across the globe. This is precisely the reason why landowners are increasingly shifting towards selling oil royalties and oil companies are benefiting from such deals too and expanding their businesses. A royalty buyer has become very popular because of several reasons. Royalty buyer is usually the oil company that invests in the land and takes care of the oil extraction costs. The landowner just receives an oil royalty, which is a certain amount of regular monthly payments. This amount depends on the quality and quantity of oil or gas reserves in the land. It also depends on the terms of the contract because that can vary also. Usually, the franchising systems charge for the royalties but even if you consider the ones that don’t, they end up making a lot of extra capital by selling the products and through a franchisee. Moreover, paying royalties is a part of the system but it is not just the franchiser but the franchisee also derives benefit from the royalties. This is usually in the form of capital, a good brand name in the market, support from a parent company or a strong and established brand name that could attract customers to the location of
the franchisee along with various other opportunities that a small business would not have access to otherwise. Even though the above-mentioned is supported by various documents and research, surveys show a different picture. They show that even in today’s age there are people who believe that paying royalties has disadvantages particularly because it belongs to a franchise system. A popular survey by the Gallup Pole suggests that around sixty percent of the franchise buyers do not believe in the benefits of paying royalties and in fact consider it a disadvantage. The survey also suggested that these people have held royalties as a reason to not purchase a franchise and open a fresh and new business. Ironically, the same survey suggests that only 40% of those who have purchased a franchise see it is a disadvantage and the rest of the 60% find it to be beneficial. This shows that in reality and among the experienced, the majority has experienced benefits of a franchise. https://docs.zoho.com/file/x6jdbf3431fe3488b4efbab57cc6e9e49a418 However, it could vary because personal experiences are always different. However, a royalty seller is always selling the name because of a solid reason otherwise nobody would be ready to pay for the rights to use the name, logo and image. Compared to a fresh start up, a franchise always has better chances of success and that too in a timely manner. They have certain advantages and perks that a start up does not have and may have to spend much less on marketing and advertisement compared to a start up, which is precisely why it is an option that must be considered.