Important definitions:

  • Cross Center Inflow: The amount that your center receives from other centers when their memberships, gift cards, prepaid cards, or packages are redeemed at yours.
  • Cross Center Outflow: The amount that you pay other franchisee when memberships, gift cards, prepaid cards, or packages that you sell are redeemed at those centers.
  • Royalty on Cross Center Inflow: The royalty that you owe the franchisor on your cross center inflow.
  • Royalty on Cross Center Outflow: The royalty that you must deduct from the franchisor on your cross center outflow.

Cross center redemptions refer to items such as gift cards, prepaid cards, memberships, and packages that are purchased in one center and redeemed at another. In cross center redemptions, the franchisee that sells the item must pay a redemption amount to the franchisee where it is redeemed.

For example, if a guest buys a gift card at a franchisee, but uses it for a service or product at your franchisee, the other franchisee pays you for the redemption. Such collections are called Cross Center inflow in Zenoti.

Cross Center Inflow and Cross Center Outflow

Cross Center inflow refers to the redemption amount that a franchisee pays your franchisee when their memberships, gift cards, prepaid cards, or packages are redeemed at yours.

On the other hand, when the items that you sell are redeemed elsewhere, the amount that you pay the other franchisee is called your Cross Center Outflow.

Royalty on Cross Center Redemptions

Like all other collections, cross center redemptions could attract royalty. Depending on your franchise model, a franchise that receives cross center inflow, might need to pay a percentage of that amount as royalty to the franchisor.

The percentage is calculated based on the royalty settings of the service or product that your franchisee provides and not the item that is redeemed. Which means, if the gift card from the other center is redeemed for a massage at your center, the royalty is calculated based on your center’s royalty settings for the massage, not gift cards.

Royalty Payments and Deductions

Unlike the royalties on items that are sold and redeemed in the same center, the royalties on cross center redemptions work both ways. All money coming into your center is charged royalty, and royalty on all outgoing money is negated.

So, you must pay a royalty on all your cross center inflows to the franchisor. You can track your cross center inflows and the royalty that applies on them using the Royalty on Cross Center Inflow report.

Conversely, you deduct a portion of all your cross center outflows from the franchisor. You can track your cross center outflows and the royalty to deduct on them using the Royalty on Cross Center Redemption Outflows report.

Table of Comparison

Refer to the following table for a quick comparison of how redemptions and royalties are shared between the centers.

See Also

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