Royalty accounting off real revenue
Fintra computes royalties from each franchisee’s own invoices, applies per-location rate overrides, accrues them to the ledger, and reports them by status - no self-reported spreadsheets.
Illustrative product view
The revenue basis is the whole game
A royalty is only as trustworthy as the revenue it’s computed on. Because Fintra is each franchisee’s accounting system, the revenue basis comes from that location’s own invoices for the period - the total of real, non-void, non-draft invoices - not a number a franchisee typed into a form.
Royalty amount
royalty_amount = revenue_basis × (royalty_pct ÷ 100)
The royalty percentage resolves per franchisee: its own override if set, otherwise the franchise default. A negative or missing basis clamps to zero.
Per-location rates
Franchise agreements aren’t uniform - a legacy location, a conversion, or an incentive deal may carry a different royalty rate. Fintra resolves the effective rate per franchisee: its own override wins (including a deliberate 0%), and otherwise it inherits the franchise default. That keeps a network of mixed agreements correct.
- Franchise-level default royalty percentage.
- Per-franchisee override, including an explicit zero.
- Open AR per location tracked alongside the royalty.
Compute, accrue, report
| Step | What it does | Persistence |
|---|---|---|
| Compute | Preview royalty per location for a period | None (preview) |
| Accrue | Post royalties to the ledger for the period | Idempotent per location + period |
| Report | List royalties by status | Accrued → invoiced → paid |
Why shared accounting changes royalties
Most franchisors chase self-reported sales and hope they’re accurate. When the royalty is computed from the same ledger that runs the location, the number is defensible on both sides - the franchisor trusts it and the franchisee can see exactly how it was derived.
Frequently asked questions
How are franchise royalties calculated?
A royalty is the revenue basis times the royalty percentage. In Fintra the revenue basis is each location’s own invoice total for the period (excluding voids and drafts), and the percentage is the location’s override if set, otherwise the franchise default. That produces a royalty grounded in real revenue.
Can different locations have different royalty rates?
Yes. Fintra resolves the effective royalty rate per franchisee: its own override takes priority - including a deliberate 0% - and otherwise it inherits the franchise default. That keeps networks with legacy deals, conversions, or incentives calculating correctly.
What are the royalty statuses?
Royalties move through accrued (posted for the period), invoiced (billed to the franchisee), and paid. You can compute a preview without persisting, accrue to the ledger idempotently, and report royalties by status so you always know what’s outstanding.
Why compute royalties from the ledger instead of self-reports?
Self-reported sales are exactly where royalty leakage happens. Because Fintra is the franchisee’s accounting system, the royalty is derived from real invoices, so the figure is defensible for the franchisor and transparent to the franchisee - reducing disputes.
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