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what is this 20%

If a restaurant owner is looking to franchise and the prompt says “a 20% profit before tax is required to attract franchisees”..what is this 20%? Is this profit margin? 

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am 26. Aug. 2021
McKinsey | NASA | top 10 FT MBA professor for consulting interviews | 6+ years of coaching

Hi, yes, they have to achieve an EBIT/revenue ratio higher than 20%

Best,
Antonello

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