With PocketSuite’s Multi-location Edition, you can set up royalty rates and other fees to track the royalties you’re owed based on the income your locations track in PocketSuite, send monthly royalty bills, and allow franchisees to set up automatic royalty payments.
In this article:
- Learn how to setup royalty rates and other fees
- Automatically generate your royalty bills
- View reports on the royalties you’re owed and what’s been paid
- Video walkthrough of royalty reporting and setup
Setup your royalty rates
To get started collecting royalties on PocketSuite, head to Settings > Royalties. If you have flat fees you charge each location every month, you can add these under Settings > Royalty fees.
Once you’ve added fees, Settings > Royalties allows you to set percentage rates for your Royalty fee and Marketing fee. Set these to 0% if not applicable for your business. As a baseline, royalties are calculated on the gross sales as recorded in PocketSuite by each location. This includes both income marked as paid and processed through PocketSuite.
After setting your percentage rates, you can add any flat fees you created below. These are added to bills each month.
Finally, you can customize which components of a location’s income are considered when calculating royalties. Without any customizations, royalties are calculated on the gross sales of each location. There are three customization options:
- Deduct refunds: This subtracts any refunds from gross sales before calculating royalties.
- Example: A location makes $10,000 in a month but also issues $500 in refunds. If the total royalty rates are 10%, this would be calculated on $9,500 (gross sales - refunds) for $950 in royalties owed for the month.
- Deduct sales tax: This subtracts any sales tax collected from gross sales before calculating royalties.
- Example: A location makes $10,000 in a month, of which $200 is collected as sales tax. If the total royalty rates are 10%, this would be calculated on $9,800 (gross sales - sales tax) for $980 in royalties owed for the month.
- Deduct gratuity: This subtracts any gratuity collected from gross sales before calculating royalties.
- Example: A location makes $10,000 in a month, of which $1,200 is collected as gratuity. If the total royalty rates are 10%, this would be calculated on $8,800 (gross sales - gratuity) for $880 in royalties owed for the month.
These toggles are compounding, so for example, using the numbers above, if all three are toggled on this would be calculated as gross sales - refunds - sales tax - gratuity. This would mean $10,000 - $500 - $200 - $1,200 = $8,100, so at a 10% total royalty rate this would total $810 in royalties for the month.
As mentioned, these rates and settings can be customized at the location level. You can also set the rate to zero for specific locations.
Royalty Reports
Once the royalty fees are set, you can view your royalties owed using the Rollup Royalties metric on the reporting dashboard. This is also where you’d view your income and other metrics related to royalties paid through PocketSuite.
Collecting Royalties
With royalty rates set, royalty bills will be automatically generated on the first day of each month and sent to each location. Royalties are calculated based on the income recorded in each location’s account, including mark paid income. The bills are generated for the previous month and include flat fees added.
You are able to edit, mark as paid, and cancel royalty bills from the multi-location account as well as charge for the royalties. Royalty bills will appear in each location’s account on their multi-location dashboard. Locations are able to pay manually using a credit card, debit card, or via ACH. They can also set up auto-pay which will process on the second of each month.
By default, processing fees are automatically passed on to individual locations. This can be edited by editing individual royalty bills and tapping Total. Processing fees for credit and debit card payments are 2.9% + $0.30 per transaction. For ACH payments, processing fees are 1% or $1, whichever is less. In order to process ACH payments, a location must verify their checking account under Settings > Payment methods, a process which takes 24 hours. Note that if royalties are paid via ACH, funds will take 7 days to process before being deposited into your account.
Under Settings > Data export, you are able to export your income from royalties as well as your royalties owed.