HQ tier includes automated royalty calculation for franchisors. Configure once, statements generate per period without manual reconciliation.
Set the royalty rate
Settings → HQ → Royalty → Rules.
- Rate — typically 5-8% of gross sales. Can be a flat percentage or tiered (e.g. 6% on first $50K, 4% above).
- Period — weekly, monthly, or quarterly.
- Carve-outs — exclude specific revenue categories (e.g. detail subscription revenue, gift cards) from the royalty calc.
- Threshold — minimum monthly royalty even on slow months (some franchise agreements require this).
What counts as "gross sales"
By default, gross sales = total paid invoice amount minus refunds. You can adjust to: - Include or exclude tips - Include or exclude tax collected - Include or exclude shipping/delivery fees - Include or exclude restocking fees
The calculation runs daily so the franchisee + franchisor both see the running royalty owed in real time.
Statement generation
On the period close date (e.g. last day of the month for monthly), SalesThumb auto-generates a statement per franchisee shop:
- Cover page: shop name, period, total owed
- Line-item breakdown by week
- Adjustments (refunds, carve-outs)
- Year-to-date running totals
- Comparison to prior period
Statement is delivered to both the franchisee and the franchisor. PDF + CSV.
Collection
Two options:
1. ACH pull — franchisee pre-authorizes the franchisor to ACH-debit on a schedule. Royalty is auto-collected within 2-3 business days of statement close. 2. Invoice-based — franchisor sends an invoice, franchisee pays via the standard payment flow.
ACH pull is the default for new franchise networks because it eliminates the chase. Invoice-based is available for franchisees who require purchase orders.
Dispute flow
If a franchisee disputes a statement line item:
1. Franchisee clicks "Dispute" on the statement in their portal. 2. Adds a note + supporting documentation. 3. Franchisor sees the dispute in the HQ dashboard, reviews, accepts or rejects. 4. Adjusted statement reissues, dispute is logged in audit trail.
Tips
- Start simple — flat rate + monthly period. Tier the rate later if you need to incentivize growth.
- Audit quarterly — even with automation, randomly spot-check a few statements per quarter to catch any configuration drift.
- Document carve-outs in writing — the franchise agreement should specify what's excluded from gross sales; your SalesThumb config should mirror that exactly.