store. For instance, Reynaldo cannot use less than Grade $10$ Idaho potatoes, must bake the potatoes at a constant $410$ degrees, must dress store

personnel in Freys$-$approved uniforms, and must have a Freys sign that meets detailed specifications on size, color, and construction. When the franchise

contract is signed, Reynaldo makes a noncontingent $$160,000$ payment to Freys. During the same year, Reynaldo pays Freys $$300,000-14\%$ of

Reynaldo's sales. How does Freys treat each of these payments? How does Reynaldo treat each of the payments?