Royalty comes from the English word derived from “Royal”. Its meaning: “that which belongs to the king, monarch or nobleman”. It can be used to refer to nobility and/or royalty. In the plural it is “Royalties”.
Formerly, its concept was defined by the payment of values for the use and/or extraction of natural resources from lands belonging to the king and/or noble.
Currently, we still use the term royalties to pay a percentage pre-established in the contract for the use of natural resources. The difference is that the term went beyond land use. Royalties are also charged for using a famous brand.
Royalties are used in various segments, and it is a win-win relationship between the owner of the brand, service or property with the supplier who will use this means as a way to increase their monthly revenue.
Many Brazilian companies are currently working with international brands and at the end of each month they pass on to the holders of these brands the percentage of final sales and/or profits made.