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FractionalPay

Use case, franchises

Franchise royalty payments, split per sale

Franchise royalty payments in FractionalPay are calculated from every sale: the royalty, the marketing fund contribution and the location's share are split by rule and posted to a ledger, so each location gets a statement it can check line by line.

No more month-end exports, percentage formulas and arguments about which refunds were netted out. One rule per agreement, one statement per location, and money that stays in your own payment account.

Try the split simulator See pricing
  • Royalty and marketing fund lines on every sale
  • A statement per location for any period
  • Several entities and currencies on the Scale plan

Royalty statement

September 2026

Beneficiary

Location 014, Austin

Due to franchisor

$6,720.00

Line Base Rate Amount
Gross sales $84,000.00
Royalty $84,000.00 6% $5,040.00
Marketing fund $84,000.00 2% $1,680.00

Worked example

One location, one month, three shares

Location 014 sells 84,000.00 USD in September. The franchise agreement sets a royalty of 6 percent of gross sales and a marketing fund contribution of 2 percent. The location keeps the rest. FractionalPay applies the same rule to every sale in the month, so the totals below are simply the sum of thousands of small splits, not a calculation someone redoes at month end.

  • Location 014

    Rule
    Remainder
    Amount
    $77,280.00

  • Franchisor royalty

    Rule
    6% of gross
    Amount
    $5,040.00

  • Marketing fund

    Rule
    2% of gross
    Amount
    $1,680.00

  • Gross sales

    Rule
    Amount
    $84,000.00

On a single 120.00 USD sale the same rule gives 7.20 USD royalty, 2.40 USD to the fund and 110.40 USD to the location. The location is the remainder party, so when a percentage of an odd amount produces a fraction of a cent, that cent stays with the location and the ledger still balances to zero. You can try the numbers for your own agreement in the split simulator.

The marketing fund is its own beneficiary with its own ledger account. That matters, because most agreements require the fund to be accounted for separately from royalty income, and a separate account shows every contribution and every spend from it without a second spreadsheet.

Ledger journal

Balanced

txn_SEP014 ·September splits, Location 014, rule v2

  • Operator balance (your account) Dr$84,000.00
  • Payable to Location 014 Cr$77,280.00
  • Platform revenue Cr$5,040.00
  • Payable to Marketing fund Cr$1,680.00

TotalDr $84,000.00 · Cr $84,000.00

How the money moves

Two franchise models, explained honestly

FractionalPay never holds, pools or transmits funds and is not a payment institution. Payments land in a platform account you own at a licensed payment operator, and we calculate the splits, keep the ledger and send payout instructions to that account. How that fits your franchise depends on who collects the customer's money.

Model one, the franchisor collects. Online ordering, central booking or membership billing runs through the franchisor's connected platform account, and each location is a connected account under it. Every sale is split the moment it succeeds: the location's share is paid out on its schedule, the royalty stays with you and the fund contribution is tracked separately. This is the full product, splits and payouts included.

Model two, the location collects. Many locations take card payments in their own account. Here FractionalPay works as the royalty engine and ledger: you record each location's sales with POST /payments from your point of sale reporting, the same rule calculates royalty and fund amounts, and the statement shows what the location owes. No payout is sent, because the money already sits with the location, and you collect the amount due the way you do today.

  • Locations are beneficiaries of type location
  • One rule per agreement version, matched by product or metadata
  • Both models can run side by side in one workspace

Split rule

Version 2 · Active

Rule name

Franchise agreement 2026

Applies to

Metadata channel is location

  1. 1 Franchisor royalty 6%
  2. 2 Marketing fund 2%
Remainder and rounding go to Location Test on $120.00 passes

Per sale or per month

Per-sale splits compared with a monthly statement

You can split each sale as it happens or close the month with a statement. Most franchisors want both: splits so that nobody waits for money, and a statement so that the location can check the arithmetic.

  • Royalty calculated

    FractionalPay per-sale split
    On every sale
    Spreadsheet at month end
    Once a month
    FractionalPay monthly statement
    Summed from every sale

  • Refunds netted out

    FractionalPay per-sale split
    Reversed per sale
    Spreadsheet at month end
    By hand
    FractionalPay monthly statement
    Shown as their own lines

  • Marketing fund kept separate

    FractionalPay per-sale split
    Yes
    Spreadsheet at month end
    No
    FractionalPay monthly statement
    Yes

  • Location share paid

    Model one only

    FractionalPay per-sale split
    On the payout schedule
    Spreadsheet at month end
    After reconciliation
    FractionalPay monthly statement
    On the payout schedule

  • Audit trail

    FractionalPay per-sale split
    Append-only ledger
    Spreadsheet at month end
    Versions of a file
    FractionalPay monthly statement
    Append-only ledger

Statements are built from the ledger, so they never disagree with it. Export them as CSV for the location, or send them to your accountant with the ledger export on the Scale plan. If you also pay music, content or brand licensors, our royalty payments page covers that side.

Refunds

A refunded catering order, reversed by share

A location sells a 500.00 USD catering order and later refunds 100.00 USD of it. The refund is reversed in proportion to each share, so the royalty and the fund give back their part and the location does not carry the whole refund alone.

100 USD refund on a 500 USD order

  • Location 014

    Original
    $460.00
    Reversed
    -$92.00
    After refund
    $368.00

  • Franchisor royalty

    Original
    $30.00
    Reversed
    -$6.00
    After refund
    $24.00

  • Marketing fund

    Original
    $10.00
    Reversed
    -$2.00
    After refund
    $8.00

  • Total

    Original
    $500.00
    Reversed
    -$100.00
    After refund
    $400.00

If the location was already paid, the 92.00 USD is carried into its next payout as a negative balance and recorded in the ledger. If your agreement puts refunds on the franchisor first, switch the rule's reversal strategy from proportional to platform first, and the statement shows the refund exactly as the agreement describes it.

For franchise finance teams

What a franchise network uses

A single brand with a few dozen locations fits Starter. Networks with many locations, several legal entities or locations in more than one country need the larger plans.

Plans are flat: Starter 199 USD, Growth 499 USD and Scale 1,499 USD a month, or half that per month billed yearly. No transaction fees from us. See pricing.

  • Royalty and fund rules

    Starter+

    Percentage and fixed lines, a remainder party and a new rule version when the agreement changes.

  • Statements per location

    Starter+

    Every location sees its gross sales, royalty, fund and refunds for any period, built from the ledger.

  • Up to 1,000 locations

    Growth+

    Starter covers 50 beneficiaries, Growth raises it to 1,000 with roles for your finance team.

  • Reconciliation

    Growth+

    The ledger is matched to your operator's balance transactions daily, with alerts on any mismatch.

  • Entities and currencies

    Scale

    Up to 10 connected accounts, for example a US and a Canadian entity, each with its own ledger.

  • Payout approvals

    Scale

    Payouts above a threshold need a second approver before they leave your account.

Location payouts

October 2026

Mon
Tue
Wed
Thu
Fri
Sat
Sun

1

$1.7k

2

3

4

5

6

7

8

9

$18.9k

10

11

12

13

14

15

16

$19.4k

17

18

19

20

21

22

23

$20.1k

24

25

26

27

28

29

30

$18.9k

31

  • Oct 1 · Marketing fund $1,680.00Paid
  • Oct 9 · Location 014 $18,920.00Paid
  • Oct 16 · Location 014 $19,400.00Scheduled
  • Oct 23 · Location 014 $20,110.00Scheduled
  • Oct 30 · Location 014 $18,850.00Scheduled

Who reads the statement

A statement a location owner can check in minutes

The most expensive part of franchise royalty payments is not the math, it is the dispute. A location owner who cannot see how a number was reached assumes it is wrong. A statement that lists gross sales, each percentage, each refund and the resulting amount ends the conversation before it starts.

Franchisors with a partner program on top of the network often run it in the same workspace, as described on partner revenue share, and the same rule engine powers revenue sharing software for other industries.

Questions

Frequently asked questions

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

Does FractionalPay collect royalties from our locations?
Not directly. When sales flow through your own connected platform account, the royalty and fund shares never leave it and only the location's share is paid out. When a location collects in its own account, FractionalPay calculates what it owes and produces the statement, and you collect it as you do today. We never hold, pool or transmit funds.
Can we change the royalty rate for one location?
Yes. Create a rule that matches that location's metadata with a higher priority. Older sales keep the rule version they were split with, so past statements do not change.
How is the marketing fund accounted for?
The fund is a separate beneficiary with its own ledger account. Every contribution is a credit to it, and its balance is visible at any time, independent of royalty income.
We operate in two countries. Does that work?
On the Scale plan you connect up to 10 accounts, each with its own ledger and currency, so a US and a Canadian entity never mix. Reports can be exported per entity.
What does it cost for a network of 40 locations?
Forty locations fit Starter at 199 USD a month, or 99 USD a month billed yearly, as long as split flow stays under 100,000 USD a month. Above that, Growth covers 1,000,000 USD. There is no fee per transaction. Details on pricing.
Can we try it with our own agreement first?
Yes. Enter a sale amount and your royalty and fund percentages in the split simulator. After signup you get a sandbox with one saved rule and demo data to test statements.

Put your franchise agreement into one rule

Run a sale through the simulator with your royalty and fund percentages and see the statement your locations would receive.

Try the split simulator See pricing

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