Manage royalties
Zenoti Payments simplifies royalty fee collection for businesses operating under a franchise model by automating the process. This ensures accurate financial tracking and seamless payment management across all locations.
Royalties, whether a percentage or fixed amount, are automatically calculated against each transaction based on predefined rules and transferred to designated bank accounts according to specific royalty categories.
These payments can be scheduled on a weekly or monthly basis, streamlining royalty distributions and ensuring efficiency throughout the settlement period.
You need to contact Zenoti to enable royalty fee deductions at the transaction level (if you intend to collect a % of royalty at the time of transaction or daily) or to get more details.
Note: This feature is currently only available in the US region.
Set up the royalties account
This article outlines the required steps for both the organization and its centers to set up royalty transfers through Zenoti.
Note: You must talk to a person from Zenoti support to enable royalty collection.
Onboarding steps for corporate or an organization
At the organization level, click Configuration.
Search for Payments and under Business Payments, select Royalty Payments.
On the Royalty Payments page, click Start setup and on the Setup royalty page, start setting up the following:
Category details
Rules setup
Bank accounts
Transfer settings
Center wise start date
Set up category details
Configure category details to define how royalty fees are applied. These settings determine royalty parameters, such as whether the fee is active, percentage-based, or fixed.
Click Add category to create categories for your royalty payments.
Give your category a name, a code and a description and select a calculation parameter.
For example: initial franchise fee, marketing or advertising fee, technology fee, and similar charges.
Select the checkbox next to Active.
Click Save and Continue.
You can review and edit categories by just clicking the three dots.
If you are no longer using a category, ensure the Active checkbox is cleared and click Save.
Set up rules
You can create one or more royalty groups to assign to specific centers. Multiple groups are useful when you need to set different royalty fee percentages for different centers.
Click Add group to create groups.
Set up rules—percentage or fixed fees—for each royalty category across products, services, , and other offerings.
Click Continue.
You can view the centers associated with the group under Centers Associated.
Set up bank accounts
You can add one or more bank accounts to collect royalty fees. These accounts will be used to receive payments from franchises.
Click Add Bank Account to add bank account details.
Enter the required information.
Note: In the Bank Account Owner field, enter the name of the actual bank account owner.
Do not enter the name of the center manager or owner.
Click Save and continue.
Note: It takes 1–2 business days for the bank details to be verified. If the bank account verification fails, review the failure reason, take necessary steps and retry.
For example: If the error says "account not found," review the bank account details and update them as needed. If it says "unauthorized," contact your bank to authorize Zenoti debits.
Click Verify and enter the exact amount that is debited from your account.
If the amount you enter matches the debit, the bank account is considered successfully verified.
After successful verification, the account's status changes to Active.
You can proceed to the next step only after at least one bank account is verified.
Set up transfers
Set up your royalty transfer preferences, including payment frequency and the designated bank accounts. These settings will control how and when royalty fees are transferred.
Here, you can direct royalty fees from different categories into separate bank accounts.
Select your preferred schedule: weekly or monthly.
Under Credit to bank account, select your preferred bank account from the drop downs.
Click Continue.
Set up center wise start date
Royalty fee calculations will begin from the specified start date. This will apply to the respective centers.
In this step, you can set different start dates for different centers. Click Continue, after you successfully set center wise start dates.
Setting up the center-wise start date brings you to the end of the onboarding process.
Ensure all other configuration steps are completed before moving on to the Royalty transfers initiation step. The chosen start date will define when royalty fee calculations for each center officially begin.
Royalty dashboard: Access the dashboard after onboarding to manage categories, rules, bank accounts, and transfer settings.
Onboarding steps for franchise or a center
At the center level, click Configuration.
Search for Payments and under Business Payments, select Royalty Payments.
On the Royalty Payments page, click Start setup and on the Setup royalty page, start setting up your bank account for royalty fee payment.
Click Add Bank Account to add bank account details.
Click Save and continue.
Note: It takes 1–2 business days for the bank details to be verified.
Click Verify and enter the exact amount debited from your account. If the amount entered matches the debit, the account will be successfully verified, and the status will change to Active.
After successful verification, the center's onboarding is considered complete.
Initiate royalty transfers
Based on your selected settlement frequency—monthly or weekly—Corp can navigate to Admin → Royalty Payments → Initiate Transfers. Here, you can review the calculated fees and initiate the fee collection process.
Note: Zenoti calculates the processing date as the end date plus the maximum financial lock period (at either the organization or center level). If no financial lock is set, the default 90-day financial lock will apply. We recommend setting the financial lock to 2-5 days and initiate royalty transfers after that. Learn more about the impact of financial lock on Royalty fee transfers (scenario 3), here.
Initiate transfers
Here, check the following details:
Calculated: This field displays the total royalty fees calculated according to your set rules for each center or royalty group. Click the amount to view a detailed breakdown.
Adjustment: If you want to provide a discount or charge an additional fee to any of the centers, enter the amount in this field for the corresponding center. For a discount, enter the values in negative (-).
To add a note for the adjustment, click Add.
Notes are mandatory for any adjustments made to the calculated amount.
Net: This field shows the total royalty amount that will be collected. Net = Calculated +/- Adjustment
The transfers can either be approved or waived. In the Action column, select an option:
Approve: Select this option if you want to approve the royalty fees (net) and send it for processing.
Waive: Select this option if you want to waive or cancel the collection of royalty fees for the corresponding center.
You can add a note when waiving off or approving. You can also approve or waive royalty fees for centers in bulk. Select all the desired centers and click Waive or Approve in the banner that appears on the top of the screen and click Submit.
The royalty collection is sent for processing and the fees are deposited into your bank account. You will receive email notifications when Automated Clearing House (ACH) transactions are initiated for any of the business payments and settlement of fees may take up to 2-5 business days.
If you've recently updated any invoices, click Recalculate to fetch the most accurate and up-to-date royalty fee details.
Note: Zenoti will not allow you to submit the royalty transactions if:
The center from which you are collecting the royalty did not set up an account.
Previously initiated transactions are pending or reversed.
The amount for the centers is not approved.
If any of the centers are still under financial lock, note that the maximum financial lock duration across all centers is applied.
For example, if Center 1 has a 5-day financial lock and Center 2 has a 30-day financial lock, you cannot proceed with the royalty transfer initiation until the 30-day lock is released.
Reporting
Use the Royalty Net Settlement report and Royalty fees transaction history for detailed tracking and analysis of royalty fees across centers.
Centers can view Digital Payments Reports for invoice-level royalty fee details.
Impacts and considerations
All centers in the organization must complete onboarding for Corporate to initiate royalty transfers across centers.
Only the 'Modified cash' accounting model is supported for royalty collections.
We recommend setting up short financial lock periods of 2-5 days to facilitate faster royalty fee transfers. See Scenario 3 Impact of Financial Lock on Royalty Fee Transfers. Note that by default, the financial lock period is set to 90 days.