RE:Franchise Royalty Basics 101nedstar is correct. Going by 2015Q3 financials and extrapolating that over a full year, The royalties being collected by DIV are $3.6m Sutton Realty, $12.4m Mr. Lube, $13.12 Franworks for a total of $29.12m.
DIV pays dividends of $.2225/share per year. With 113.1m shares, they pay $25,164,750 in dividends annually.
The difference between the $29.12m revenue and the $25.16m dividends paid annually is $3.96m. That is a very high payout ratio (86.4%). (With Ned's estimate of $28m in revenue, it is a payout ration of 96.2%). If the payout ratio gets too close to 100%, then the remedy will be to lower the dividend rate from $.2225/share/year to something like $.19/share/year. Such a drop was likely avoided by the officers recently agreeing to receive shorter term their salary in shares as opposed to cash.
With the s/p at $2, the dividend yield is over 11%.
There is no correlation between the royalty % (6%) and the dividend yield % (11%). The royalty % is fixed and the correlation is between the total SSSG (same store sales growth) and the $.2225/share/year dividend rate. The higher the SSSG, the higher the dividend rate will become.
The money provided to places like Mr. Lube and Franworks was to allow them to actually open up more business locations, thus the overall royalty (with more locations) could potentially be higher even if the SSSG is down.
The Dividend yield and the dividend rate are two separate things. Like Ned and the Babe says, micro-economics basics101.