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Paying royalty or franchise fees

If you own a franchise, the corporate office (the franchiser) sets the royalty or franchise fees for which you're responsible. Royalties may be based on sales volume, a net sales figure, the population of the area you're serving, or any other configuration established by the corporate office.

Some franchisers bill their franchisees for the exact fee they expect. (If that is your situation, you can enter the franchise fee as a bill in QuickBooks.) Others, however, expect franchisees to send in a sales report, and the fee is based on a percentage of the sales shown on that report.

If you need to determine your sales volume for the month (or the week, or another period), you can create a QuickBooks sales report. If you've been entering customer invoices in QuickBooks (or a daily sales summary based on your cash register tape), you can view a sales report by following the steps below.

To determine your sales volume for a given period

  1. Go to the Reports menu, choose Sales, and then click Sales by Item Summary.

  2. Click the Dates drop-down list and choose a time period for which you want to pay a royalty or franchise fee.

    The Amount column shows your total sales for each item. You can see the total sales figure for all your items by looking at the last line in the Amount column.

  3. Click the Memorize button.

QuickBooks memorizes report settings, not data. This lets you quickly display your customized sales report. To recall the memorized report, go to the Reports menu, choose Memorized Report List, and then click Memorized Reports.

By using the total sales figure, you can calculate what your royalty payment should be. You can then go to the Write Checks window to enter the payment.

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