Jen: This is the PKF Texas Entrepreneur’s Playbook. I’m Jen Lemanski, and I’m back once again with Carlos Gomez, an Audit Manager and one of the faces of the PKF Texas Contract Compliance Services team. Carlos, welcome back the Playbook.
Carlos: Thanks, Jen.
Jen: So, Carlos, you and I have talked off video about licensing and royalty audits. Are they the same thing?
Carlos: They’re just a term that’s synonymous with licensing. Royalties are just the funds that you receive from your contract agreement, whether it be a licensed franchise or just a vender.
Jen: So, are these very commonplace in the contract compliance services world?
Carlos: They are. Royalties is basically your revenue, as rather being a licensor; that’s where you get your money from. It’s your third party that’s collecting their share and then paying forward your share.
Jen: Is there a chance of misreporting going on during a license agreement?