One way to get into a monopolistically competitive market is to get a franchise for a nationally advertised product. If you want to get into the donut market, you could pay a franchise fee of $40,000 to Allied Domecq, the parent company of Dunkin Donuts. That gives you the right to sell donuts under the Dunkin Donuts brand. You€™ll also get a few weeks of training at the corporate headquarters in Massachusetts and some help in organizing a grand opening. Once you start making money, you€™ll pay a royalty to the parent company equal to 5.9 percent of your sales. How much money are you likely to make in your donut shop? You will compete for donut consumers with other donut shops, bakeries, grocery stores, and coffee shops. Given the small barriers to entering the donut business, you should expect keen competition for consumers. Although your brand-name donuts will give you an edge over your competitors, remember that you must pay the franchise fee and royalties. In the monopolistically competitive donut market, you should expect to make zero economic profit, with total revenue equal to total cost. Your total cost includes the franchise fee and royalties, as well as the opportunity cost of your time and the opportunity cost of any funds you invest in the business.
Table shows the franchise fees and royalty rates for several franchising opportunities. The fees indicate how much entrepreneurs are willing to pay for the right to sell a brand-nameproduct.

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FRANCHISING FEES AND ROYALTIES Franchising Fee $40,000 20,000 24,000 35,000 Royalty Rate Brand and Product Dunkin' Donuts: Coffee and donuts Great Clips: Haircuts Glass Doctor: Mobile windshield repair Flowerama: Flowers, plants, gifts 4-7