Catch royalty underreporting before an audit does
Because Fintra is each franchisee’s accounting, it can corroborate reported sales against payments and costs - scoring the risk that a location is underreporting to pay less royalty.
Illustrative product view
The problem only shared accounting can solve
Royalties are paid on reported sales, and a franchisee has an incentive to underreport. A traditional franchisor rarely sees the point-of-sale, so underreporting is hard to catch without an expensive audit. When Fintra is the franchisee’s accounting system, the franchisor can corroborate reported sales against independent signals in the same books.
Three corroborating signals
| Signal | What it checks | Weight |
|---|---|---|
| Payments corroboration | Payments/deposits received vs reported sales | 45 |
| Cost floor | Payroll + COGS imply a minimum plausible sales level | 35 |
| Trend anomaly | Sharp reported-sales drop while costs stay flat | 20 |
A ranked, explainable risk score
The three signals combine into a 0–100 risk score per location and period. Locations at or above the flag threshold are surfaced, and the output is ranked with explainable drivers - so a franchisor knows not just which location to look at, but why.
- Risk score 0–100 per location and period.
- Locations flagged at or above the threshold.
- Explainable drivers show which signal raised the score.
- Ranked so the highest-risk locations come first.
Why this is a genuine differentiator
Royalty audits are expensive and adversarial, and most underreporting is never caught. A continuous, explainable risk score that only works because the franchisor and franchisee share an accounting system turns a periodic audit into ongoing assurance - protecting royalty revenue without souring every relationship.
Frequently asked questions
What is royalty integrity monitoring?
It’s the detection of likely sales underreporting by franchisees, who are incentivized to report lower sales to pay less royalty. Fintra scores the risk by corroborating reported sales against payments received, a cost-implied sales floor, and suspicious sales-versus-cost trends.
How does Fintra detect underreporting?
It combines three signals into a risk score: whether payments and deposits received are consistent with reported sales, whether payroll and cost of goods sold imply a higher minimum sales level, and whether reported sales dropped sharply while costs stayed flat. Locations above a threshold are flagged with explainable drivers.
Why can Fintra catch this when other tools can’t?
Because Fintra is the franchisee’s accounting system, the franchisor can corroborate reported sales against independent signals in the same books - payments and costs - rather than relying on self-reported figures alone. That shared-ledger position is what makes continuous integrity scoring possible.
Does the risk score replace a royalty audit?
It’s a continuous, explainable early-warning signal that points audits where they’re warranted, not a legal determination. It ranks locations by risk with the drivers behind each score, so a franchisor can focus scarce audit resources on the locations most likely to be underreporting.
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