Hee Lee is considering two food franchises. The annual gross sales of his food service operation is expected to be $1,200,000, and he desires to minimize his royalty and advertising marketing fees for a single year. The fee structures of the two franchises are:

Fish City By the Sea Royalty fee 3.5% 4.0%

Advertising / marketing fees 4.0% 3.0%

Required:

Calculate the annual fees for the two franchises. Which do you recommend?