Best Subs Inc. grants franchisees the right to operate a restaurant using the company's name, menu, and operational procedures. On March 1, a franchisee enters into a 4-year contract with Best Subs Inc. and pays a $600,000 initial franchise fee. The franchisee also pays $40,000 for equipment for the restaurant with a delivery date scheduled in 10 days. Per the contract, the franchisee will also pay a royalty equal to 3% of the franchisee sales over the contract life. The commission for the month of March is estimated to be $12,000 based upon Best Subs Inc. extensive experience with new franchises. What amount of revenue will Best Subs Inc. record on March 1?
Select one:
a. $12,500
b. $64,500
c. $600,000
d. $652,000
e. $0
f. $24,500