How royalty calculation and collection work in HQ tier

HQ tier includes royalty calculation for franchisors: set up a rule once, and statements generate automatically without manual reconciliation. Collecting the money is a separate step that you start yourself. More on that below.

Set the royalty rule

HQ dashboard → Royalty → Rule. This page edits your one org-wide default rule, which applies to every shop. There's no screen for creating a per-shop rate override today.

• Apply percentage to (the basis): what the royalty is calculated on. There are three choices:
• Gross sales: money received from customers in the period, before sales tax. That includes payments, deposits (even before the invoice exists) and gift-card sales. Refunds are not subtracted. Tips, card surcharges and gift-card redemptions don't count. This applies to periods starting November 1, 2026 or later. Periods that start before then are still billed on Net sales.
• Net sales: sales invoiced in the period, before sales tax, minus refunds and discounts.
• Collected: payments received in the period, before sales tax, minus refunds.
• Structure: Flat % (one percentage), Tiered (brackets, for example 6% on the first $50K and 4% above), or Fixed $ (a flat dollar amount per period).
• Reporting period: Monthly (one statement per calendar month) or Weekly (one statement per 7-day period). There's no quarterly option.
• Floor and cap: an optional minimum royalty owed per period even on slow months, and an optional maximum.
• Early-payment discount / late-payment penalty: optional, applied on top of the base royalty depending on when the franchisee actually pays.
• Local marketing fund: a separate optional marketing-spend requirement, distinct from the royalty itself.

The same page has two org-wide settings, Royalties are billed through another system and Hold statements for review. See Royalty options: billed elsewhere, hold, mark paid.

Statement generation

For monthly periods, statements for the prior month generate automatically at the start of the following month. No manual trigger needed.

You (or your HQ team) can also generate or regenerate a period's statements on demand from HQ dashboard → Royalty, which is useful if you need to correct something after the automatic run.

The HQ statement detail page shows the full line-item breakdown (royalty, local marketing, national marketing, tech fee, credits) and the total due.

The franchisee's own Reports → Royalties page shows a summary table per statement (gross, royalty, combined marketing, tech, due, paid, balance, status, due date) plus a credits section below. For the fully itemized version, HQ shares the statement detail view.

Each statement's detail page has a PDF button, and each period's page has an Export CSV button for that period's statements.

Sending statements and collection

A daily job emails any generated-but-unsent statements to the franchisee, with either a pay-now link or a note that HQ collects the amount directly, depending on how that shop is set up to pay. Two settings change this: with Hold statements for review on, nothing is emailed until you click Send now on the period, and with Royalties are billed through another system on, statements are never emailed.

No scheduled job charges or debits a franchisee. Collection is something an HQ team member starts, one statement or one period at a time:

• ACH: if a shop has ACH set up, HQ generates a NACHA file from the period's page (Generate ACH File), using the bank details under Royalty → ACH setup, which your bank runs as a batch debit. SalesThumb builds the file; it doesn't submit it or pull funds itself.
• ACH auto-draft (limited availability): separate from the file above, SalesThumb can pull one statement's balance from the franchisee's linked bank account through SalesThumb Payments. It is off by default and is switched on per organization by SalesThumb; it isn't a setting you can turn on yourself. Where it's on, the franchisee links a bank account and an owner or admin of their shop accepts the ACH debit authorization on their HQ Connect → Royalty tab. Then an HQ team member with permission to record royalty payments opens the statement and clicks Run ACH auto-draft, confirming the amount shown. It only runs when you click, one statement at a time, and it's refused if the statement hasn't been sent, isn't collected by ACH, is paid, waived, written off or disputed, has no balance, belongs to a period that already has an ACH (NACHA) file, or the shop's ACH switch is off. The statement's debit status then reads Processing until the bank result arrives, and ends as Succeeded or Failed; a failed draft can be tried again. A background check reconciles drafts whose result never arrived, but it never starts one.
• Card: marked "Soon." Card collection isn't fully set up yet, so it can't be picked as a collection method.
• Invoice: the franchisee pays manually.
• QuickBooks: this only labels the statement as a QuickBooks bill for your own bookkeeping. SalesThumb doesn't push it to QuickBooks Online. You record it there yourself. (This is separate from the one-way QuickBooks Online sync under Settings → Integrations, which pushes paid customer invoices, not royalty statements.)
• Manual: the franchisee pays by check or another off-platform method, and you record it.

To record payments quickly, use Mark paid on a statement or Mark selected as paid for several at once. Both ask for the date the payment was received.

Dispute flow

1. Disputing a statement is done from the statement's detail page: HQ dashboard → Royalty → [period] → [shop's statement] → Raise dispute. The franchisee's own Reports → Royalties page shows every statement in summary but doesn't link to the detail page yet, so a franchisee who wants to dispute a line needs to flag it to whoever manages your HQ dashboard (statement number and reason), who enters it from there.
2. That marks the statement disputed and logs it to the audit trail.
3. On the HQ side, you review it on the same detail page and close it out one of two ways. Resolve dispute (with a required resolution note) puts the statement back on the status that matches what's actually been paid, for when the dispute doesn't hold up and the balance still stands. Waive (with a logged reason) is for when it does hold up and you're forgiving the balance. Neither recalculates the total. If the numbers need to change, regenerate the period's statements instead.

Correcting a mistake

Each of the above can be undone from the same statement detail page. Every correction needs its own typed reason and writes its own entry to the audit trail:

• Reopen dispute: undoes a Resolve dispute and puts the statement back to disputed, with the original dispute reason kept.
• Reverse waiver: undoes a Waive. The statement returns to its real balance, recalculated from the payments recorded against it.
• Void (on the statement's Payments recorded list): reverses one mistaken payment by adding an offsetting negative entry next to it, rather than editing or deleting the original, so both stay visible in the history. It corrects SalesThumb's own record; it doesn't reverse a real bank transaction.

These correction tools need the Correct royalty ledger permission, which org owners and org admins have by default. An org owner can give it to others.

Tips

• Start simple: flat rate and monthly period. Tier the rate later if you need to reward growth.
• Spot-check statements: even with automatic generation, open a few statements each quarter to catch setup mistakes.
• Match your agreement: your franchise agreement should say whether royalty is based on gross, net or collected revenue. Your SalesThumb rule should match it exactly.

Frequently asked questions

Q: What counts toward Gross sales?

A: Money received from customers in the period, before sales tax: payments, deposits and gift-card sales. Refunds aren't subtracted, and tips, card surcharges and gift-card redemptions don't count.

Q: I picked Gross sales. Why do my October statements look like Net sales?

A: Gross sales applies to periods starting November 1, 2026 or later. Periods that start before then are still billed on Net sales.

Q: Does SalesThumb collect the royalty money for me?

A: Not on its own schedule. It calculates and emails statements and can build an ACH file for your bank. Where SalesThumb has switched on ACH auto-draft for your organization, an HQ team member can also pull one statement's balance from a franchisee's linked bank account by clicking Run ACH auto-draft. Nothing is charged or debited automatically, and cards aren't charged.

Q: Can I stop statements from being emailed automatically?

A: Yes. Turn on Hold statements for review on the Royalty Rule page, then send each period yourself with Send now.