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FractionalPay

Royalty management software

Royalty payments calculated on every sale

Royalty management software should take each sale, apply the royalty rate in your agreement and keep a statement per beneficiary. FractionalPay does it the moment a payment succeeds, for franchise royalties, marketing fund fees and licensing royalties alike.

  • Royalty and marketing fund split on gross sales
  • Statements per location, licensor or rights holder
  • Tax form status and yearly earnings statements

Royalty statement

September 2026

Beneficiary

Franchisor royalties

Royalty earned this period

$11,565.00

Line Base Rate Amount
Location 014 royalty $84,000.00 6% $5,040.00
Location 022 royalty $61,500.00 6% $3,690.00
Location 031 royalty $47,250.00 6% $2,835.00

Franchise royalties

Why royalty reports arrive late and wrong

In most franchise systems the royalty is calculated after the fact. Each location reports gross sales, someone in finance applies 6 percent for the royalty and 2 percent for the marketing fund, issues invoices and chases the money. Refunds, voids and late reports turn a simple percentage into a monthly reconciliation project.

When customer payments for every location run through your platform account, there is nothing to report. FractionalPay splits each payment at the source. The location's share, the royalty and the marketing fund contribution are recorded separately, so the royalty is never estimated and the fund is never mixed with franchisor revenue.

The legal model is simple. Payments land in your own platform account at a licensed payment operator. FractionalPay calculates the split, keeps the ledger and sends payout instructions to that account. We never hold, pool or transmit funds and we are not a payment institution.

Worked example

Three locations, one month of royalties

A franchise system charges a 6 percent royalty and a 2 percent marketing fund contribution on gross sales. Locations keep 92 percent. Here is September across three locations, as FractionalPay accumulates it payment by payment.

  • Location 014

    Gross sales
    $84,000.00
    Royalty 6%
    $5,040.00
    Fund 2%
    $1,680.00
    Location 92%
    $77,280.00
  • Location 022

    Gross sales
    $61,500.00
    Royalty 6%
    $3,690.00
    Fund 2%
    $1,230.00
    Location 92%
    $56,580.00
  • Location 031

    Gross sales
    $47,250.00
    Royalty 6%
    $2,835.00
    Fund 2%
    $945.00
    Location 92%
    $43,470.00
  • Total

    Gross sales
    $192,750.00
    Royalty 6%
    $11,565.00
    Fund 2%
    $3,855.00
    Location 92%
    $177,330.00

Every row adds up to its gross sales and every column adds up to the total, because each payment was split exactly once. The ledger on the right shows a single 250.00 USD order at Location 014: 230.00 USD payable to the location, 15.00 USD of royalty as franchisor revenue and 5.00 USD payable to the marketing fund.

A system moving 192,750 USD a month through split rules sits on the Growth plan, which covers up to 1,000,000 USD of split flow a month along with tax data and reconciliation. Franchise groups with several entities or currencies use Scale. Details on pricing.

Ledger journal

Balanced

txn_6RY014 ·Split of order 014-77821 by rule Franchise standard v4

  • Operator balance (your account) Dr$250.00
  • Payable to Location 014 Cr$230.00
  • Platform revenue Cr$15.00
  • Payable to Marketing fund Cr$5.00

TotalDr $250.00 · Cr $250.00

Licensing and content royalties

Royalties per title, per format, per rights holder

The same engine handles licensing. A learning platform that licenses courses, an audio library paying authors and narrators, or a software marketplace paying for licensed components all owe a percentage of each sale to someone who is not the seller.

A rule matches on the product or on metadata such as the title or format, then pays the licensor and any other rights holder their rate. A title can pay 25 percent to the author and 5 percent to the narrator while another pays a fixed amount per sale. Refunds reverse royalties by the same ratio, so rights holders never earn on money you returned.

  • Rates per product, title or format through metadata matching
  • Percentage and fixed royalty lines in the same rule
  • Rule versions, so a new contract never rewrites past statements

Split rule

Version 1 · Active

Rule name

Licensed audiobooks

Applies to

Metadata format is audiobook

  1. 1 Author 25%
  2. 2 Narrator 5%
Remainder and rounding go to Platform Test on $24.00 passes

Statements and payouts

From split to statement to payout

Royalty payment software is only useful if the people being paid can check the numbers. FractionalPay builds the statement from the same ledger lines that drive the payout, so the two cannot disagree.

  1. 01

    Split on every payment

    Royalty, fund and location shares are written when each customer payment succeeds.

  2. 02

    Statement per beneficiary

    Each location, fund or licensor gets a period statement with base, rate and amount for every line.

  3. 03

    Tax data alongside

    Tax form status, VAT breakdown per line and yearly earnings statements per beneficiary on Growth.

  4. 04

    Payout on schedule

    Location and fund shares are sent monthly or weekly through your account, above a minimum you set.

Payout calendar

October 2026

Mon
Tue
Wed
Thu
Fri
Sat
Sun

1

$77.3k

$56.6k

$43.5k

$3.9k

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

  • Oct 1 · Location 014 $77,280.00Paid
  • Oct 1 · Location 022 $56,580.00Paid
  • Oct 1 · Location 031 $43,470.00Paid
  • Oct 1 · Marketing fund $3,855.00Paid
September shares paid on October 1

Order 014-77821

Balanced

Gross payment

$250.00 USD

  • Location 014 $230.00
  • Royalty $15.00
  • Marketing fund $5.00
Shares add up to the payment $250.00

For the controller

A royalty close that takes minutes, not days

The controller of a franchise or licensing business owns two numbers every month: what the business earned in royalties and what it owes to everyone else. With splits written per payment, both are already in the ledger when the month ends. Closing means reviewing exceptions, not building the report.

Daily reconciliation matches the ledger against your account's balance transactions and flags anything that does not match. The full ledger exports as CSV, and Scale adds journal format exports on a schedule for your accounting system. Read more on franchise royalty payments and payment reconciliation software.

Questions

Frequently asked questions

Something else on your mind? Write to [email protected] or read the API documentation.

What does royalty management software do?
It applies royalty rates from your agreements to each sale, keeps a running balance and statement for every beneficiary and pays them out. FractionalPay does this per payment, for franchise royalties, marketing funds and licensing royalties.
Can the royalty and the marketing fund be kept apart?
Yes. The royalty is recorded as your revenue and the fund contribution as a separate payable, each with its own ledger account and statement.
Do locations need to report sales?
Not for payments that run through your platform account, because each one is split as it happens. Royalties on sales outside that account are not calculated automatically.
Does FractionalPay hold royalty money?
No. Payments stay in your own platform account at your payment operator. FractionalPay calculates shares, keeps the ledger and sends payout instructions to that account. We never hold, pool or transmit funds.
What tax data do beneficiaries get?
On Growth and Scale each beneficiary has tax form status tracking, a VAT breakdown per line and yearly earnings statements your accountant can use.
Can we change a royalty rate mid-year?
Yes. Rules are versioned. Payments before the change keep the old rate and later payments use the new one, so past statements stay exactly as they were sent.

Model your royalty split in the simulator

Enter a sale amount, add a 6 percent royalty, a 2 percent fund and the location share, and see the ledger lines and payout date at once.

No transaction fees from us. Runs on your own payment account at a licensed operator. FractionalPay never holds your funds.