Franchise royalty management software
Every agreement’s royalty, marketing-fund and technology-fee structure — flat, tiered, sliding, split, minimum or ramped — applied automatically to the sales each location’s POS already reports into Gorilla Dash, with a statement every period, a reconciliation of what was paid against what was owed, and the collection handed to the automated ACH and direct-debit pulls.
Franchise royalty management software calculates what each franchisee owes the franchisor every period — the royalty on sales, the contribution to the national marketing fund, any local or regional advertising fund, technology and software fees, and the minimums, caps and relief periods the agreement specifies — from the location’s reported sales, then issues the statement, records the payment and reconciles the two. In a network of any size it is the franchisor’s single largest revenue process, and in most networks it still runs on a monthly self-reported sales figure, a spreadsheet of percentages and an invoice typed by the finance team.
The difficulty is not the arithmetic. It is that no two agreements are quite the same. A brand that has been franchising for fifteen years has a 2011 agreement at 5% flat, a 2016 agreement with a sliding scale that steps down above a sales threshold, a multi-unit operator with a split royalty across their locations, a new opening on a six-month ramp, a marketing fund that changed from 2% to 2.5% at the last renewal, and a resale where the buyer inherited the seller’s terms. Every one of those has to be applied to the right sales figure, in the right currency, in the right period, and defended when the franchisee queries it.
Royalty management inside a franchise ERP starts from the fact that the platform already holds the sales. Gorilla Dash connects to each location’s POS, accounting and job-management systems for financial reporting, which means the gross sales figure the royalty is computed on is the same figure the location, the territory manager and the CEO are already looking at — not a number keyed into a form on the fifth of the month. This page sets out what the software has to do, the royalty structures it has to support, how a period runs from sales close to statement, and how Gorilla Dash builds it into the platform the network reports from.
Royalty terms are set by your franchise agreements and your accountants. Gorilla Dash applies the structures you configure to the sales data it holds and produces the statements; it does not determine what your agreements mean. Reconcile the configuration against each agreement with your finance and legal teams before the first live period.
From the close of the sales period to a reconciled payment, with every number traceable back to the transactions it came from.
At the end of each week or month the period’s sales are locked for every location from the connected POS, online ordering, accounting or job-management feed — gross, net of the exclusions the agreement defines, in the location’s currency. Locations without a live feed are chased for a self-reported figure, and the report shows which is which.
The royalty, marketing-fund and fee rules attached to each location’s agreement are applied to its sales: the rate or tier, the sliding-scale thresholds, the minimum, the cap, the ramp or relief period, and any split across a multi-unit operator’s locations. Every line of the calculation is stored with the rule that produced it.
Before anything is issued, finance sees the exceptions: a location whose sales dropped by more than a set percentage, a feed that stopped mid-period, a minimum that kicked in, a self-reported figure that differs from the POS. Each is approved, adjusted or held with a note.
Each location receives a statement showing its sales, each charge, the rule behind it and the total, with the supporting transactions one click away. The franchisee sees the same figures head office sees, so the query rate falls before the first payment is due.
The amount due is handed to the collection method on the agreement: an automated ACH or direct-debit pull on the due date, a card on file, or an invoice for the networks that still pay by transfer. Payments are matched back to the statement automatically.
What was owed, what was paid, what is outstanding and what is disputed, per location and for the network, with ageing, dunning and the accounting export. Royalty revenue becomes a line the CFO can forecast from the sales trend rather than discover at month-end.
The structures below are the ones real agreements use. A system that handles only a flat percentage handles only the newest, simplest agreements in the network.
Rates, tiers, funds and fees attached to each location’s agreement with effective dates, so a 2011 agreement and a 2024 agreement are charged what they each say, and a renewal or transfer changes the terms from the date it takes effect.
Rates that step up or down at sales thresholds — per period, cumulative for the year, or on the increment above the threshold only — with the threshold in the location’s currency and the calculation shown on the statement.
A royalty shared between the franchisor and an area developer or master franchisee, a rate that depends on the operator’s total sales across their locations, or a fee split across product categories, computed per line and settled to each party.
National advertising fund, regional or local co-op fund and any brand-development levy computed as separate charges with their own rates, minimums and accounts, reported as fund income against the campaigns the fund paid for.
Minimum royalties that apply when sales fall below a floor, caps that limit the charge, opening ramps that phase the rate in over the first months, and temporary relief periods approved by head office with a start, an end and an approver.
What counts as gross sales — sales tax in or out, refunds, discounts, gift-card sales versus redemptions, delivery-platform commissions, catering, memberships — configured per agreement and applied to the standardised transactions the platform already holds.
Fixed monthly fees, per-user fees and pass-through charges on the same statement as the royalty, so the franchisee receives one document and head office reconciles one payment.
A statement per location per period showing the sales, each charge, the rule that produced it and the transactions behind the sales figure, delivered by email and available in the franchisee’s dashboard alongside their sales reports.
Self-reported sales compared with POS feeds, period-on-period variance flags, and the sales-audit trail for every statement, so under-reporting is a report finance runs rather than a suspicion a field manager raises.
Illustrative examples of each structure. Real agreements combine several — a tiered royalty with a minimum and a separate marketing fund is common.
| Structure | How it works | Example | Why networks use it | What the statement shows |
|---|---|---|---|---|
| Flat percentage | One rate applied to gross sales every period | 6% of gross sales, monthly | Simple to explain, simple to audit | Sales, rate, royalty |
| Tiered or sliding scale | The rate changes at sales thresholds | 6% on the first $50,000 a month, 5% above it | Rewards growth; keeps the largest locations in the network | Sales per tier, rate per tier, royalty per tier |
| Minimum royalty | A floor charged when the percentage would be lower | The greater of 6% of sales or $1,500 a month | Protects the franchisor’s revenue from under-performing or under-reporting locations | Percentage royalty, minimum, which applied and why |
| Opening ramp | The rate phases in over the first months of trading | 0% for months 1–3, 3% for months 4–6, then 6% | Gives a new location time to build sales | Months since opening, rate for this month |
| Split royalty | The royalty is shared between parties | 6% collected; 4% to the franchisor, 2% to the area developer | Area-development and master-franchise structures | Total royalty and each party’s share |
| Marketing funds | Separate contributions to national and local funds | 2% national fund plus 1% regional co-op | The funds are accounted for and reported separately from royalty income | Each fund as its own line, with its own rate |
| Fixed and per-unit fees | Amounts that do not depend on sales | $300 a month technology fee; $50 per additional user | Recover platform, software and support costs | Each fee as its own line, with the quantity |
The locations, rates and figures are illustrative; the sequence is how the period is designed to run for a network whose sales already flow into the platform.
1st of the month, 6:00 am
The platform
Sales for the previous month are locked for 140 locations from their connected POS, online-ordering and accounting feeds. Six locations without a feed are emailed for their self-reported figure. Every location’s gross sales are already on the dashboard the franchisee looked at last night.
1st of the month, 6:05 am
The platform
Ninety locations are on the current 6% tiered agreement, thirty on the older 5% flat, twelve on opening ramps, eight under a master franchisee whose split takes a third of the royalty. The national fund is 2% for everyone; the two regional co-ops are 1% for their members. Every line is computed and stored with the rule that produced it.
1st of the month, 9:00 am
Finance
Finance opens the exception list: four locations whose sales fell more than 20% on the prior month, two whose POS feed stopped on the 26th, three where the minimum applied, one self-reported figure well below its POS history, and one approved relief period ending. Each is checked and cleared with a note. The rest need no attention.
2nd of the month
The franchisees
Statements are issued. A franchisee querying their tiered royalty opens the statement, sees the sales per tier and the transactions behind them, and finds the answer in the same place they check their sales every week. Queries to head office fall to a handful, and each one is about the sales, not the arithmetic.
5th of the month
The platform
The amounts due are debited by ACH and direct debit from the accounts on each agreement. Two returns come back for insufficient funds and enter the retry and reminder cycle; the rest settle and are matched to their statements. Royalty income for the month is a reconciled figure in the CFO’s report by the end of the week.
Each of these costs money directly — under-collected royalties, finance time, disputes — and indirectly, in the trust between the franchisor and the network.
The problem
Royalties are computed on a monthly figure the franchisee enters into a form. Head office has no way to check it without an audit, so under-reporting is caught years later, if at all, and the honest franchisees subsidise the rest.
What good looks like
The royalty is computed on the sales the platform already receives from the location’s POS and other systems. Where a location self-reports, the figure is compared with its history and flagged when it drifts.
The problem
Fifteen years of agreements means fifteen years of exceptions in a spreadsheet only one person understands. When they are on leave the statements are late; when they leave, the network discovers how many locations were being charged the wrong rate.
What good looks like
Each agreement’s structure is configured once with effective dates, applied automatically, and shown on the statement. The knowledge is in the system, and a rate that changes at renewal changes itself.
The problem
The invoice says “Royalty — $3,412.50”. The franchisee cannot see the sales figure it came from or the tier that applied, so every statement is a phone call, and every phone call is a small argument about trust.
What good looks like
The statement shows the sales, each charge, the rule and the transactions behind the sales, in the same dashboard the franchisee checks their performance in. Queries are about the data, and the data is shared.
The problem
Fund contributions are collected with the royalty and reported nowhere. Franchisees believe the fund is spent on head office, and there is no report that says otherwise.
What good looks like
Fund contributions are separate lines with their own account, and the platform reports fund income against the campaigns it paid for and the revenue those campaigns produced at each location.
The problem
A new location’s ramp ends and nobody notices for four months. A relief period granted during a road closure never ends. A minimum is waived by a phone call and the waiver is not written down anywhere.
What good looks like
Ramps, minimums and relief have start and end dates, approvers and notes on the agreement record, and the exception list shows every period in which one applied.
The problem
The CFO learns the month’s royalty income when the invoices are finally issued. There is no forecast because there is no live sales figure to forecast from.
What good looks like
Because the sales are live, the royalty accrues live. Mid-month, the expected royalty and fund income for the period is already a number on the finance dashboard.
Royalty management is a module of the same franchise ERP that already holds every location’s sales, reports and payment methods — which is why the royalty can be computed from the data rather than requested from the franchisee.
Gorilla Dash connects to each location’s POS, online ordering, accounting and job-management systems for financial reporting. The royalty is a rule applied to that data, so the figure on the statement is the figure on the dashboard.
The franchisee sees their statement next to their sales, benchmarks and marketing reports, so a royalty query is answered where the sales already live rather than by a separate finance portal.
The same payment rails the platform uses for network-store orders and memberships — ACH, direct debit and cards on file — collect the royalty on the due date, with returns, retries and reminders handled automatically.
Marketing-fund income sits in the same platform as the campaigns it pays for and the sales those campaigns produced, so the fund is reported by revenue per location rather than defended by impressions.
Self-reported figures against POS feeds, period-on-period variance and the transactions behind every statement give finance a sales-audit trail that runs every period instead of a field audit every few years.
Live sales mean live accruals: the expected royalty and fund income for the period, by location and for the network, is on the finance dashboard mid-period, with the trend the CFO can forecast from.
Franchise royalty management software calculates what each franchisee owes each period — royalty on sales, national and local marketing-fund contributions, technology and other fees, with the minimums, caps, ramps and splits their agreement specifies — from the location’s reported sales, issues the statement, collects the payment and reconciles the two. It replaces the self-reported sales form, the spreadsheet of rates and the hand-typed invoice with a per-agreement structure applied automatically to sales data.
From the systems each location already connects to Gorilla Dash for financial reporting — its POS, online-ordering platform, accounting file or job-management system — standardised into one data model so gross sales means the same thing at every location. Locations without a live feed can self-report, and the platform compares the figure with the location’s history and flags drift.
Yes. Rates that step at sales thresholds — per period, cumulative for the year, or on the increment above the threshold — minimum royalties, caps, opening ramps, approved relief periods, split royalties for area developers and master franchisees, and separate national and local marketing funds are all structures attached to an agreement with effective dates. The statement shows which applied and how.
Each location’s agreement carries its own structure, so a network with fifteen years of agreements charges each location what its own contract says. Renewals, transfers and amendments change the terms from their effective date, and the previous terms remain on the record for the periods they applied to.
However your agreement defines it. Sales tax, refunds, discounts, gift-card sales and redemptions, delivery-platform commissions, catering, memberships and other categories are included or excluded per agreement, and the definition is applied to the standardised transactions the platform holds, so the same rule produces the same figure at every location.
As separate charges with their own rates, minimums and accounts: a national advertising fund, regional or local co-op funds and any brand-development levy each appear as their own line on the statement and are reported as fund income. Because the campaigns the fund pays for run in the same platform, fund spend is reported against the revenue it produced at each location.
A statement per period showing their sales, each charge, the rule behind it and the transactions behind the sales figure, in the same dashboard they use for their sales reports and benchmarks. They see the same numbers head office sees, which is what turns a royalty query from an argument into a question about the data.
By the method on the agreement: an automated ACH or direct-debit pull on the due date, a card on file, or an invoice for networks that still pay by transfer. Payments are matched to statements automatically, returns enter a retry and reminder cycle, and outstanding and disputed amounts are aged per location. Automated collection is covered in depth on its own page.
It gives finance the evidence to. Self-reported sales are compared with POS feeds where both exist, every location’s period-on-period variance is flagged past a threshold, and the transactions behind every statement are retained, so a sales audit is a report run each period rather than a field visit every few years.
Royalty management is part of the finance module, offered alongside the Gorilla Dash base platform (USD $52 per location per month with unlimited team members), which already includes the financial reporting the royalty is computed from. Pricing depends on the number of locations and the collection methods you use — talk to us and we will scope it with you.
Bring two or three of your agreements and the systems your locations run, and we will show the period from sales close to statement to collection — book a demo with our team.
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