FR Paid by Associates and Franchise Royalty Doesn’t Match

As part of the Weekly Soft Close Checklist and the Transmittal Checklist, market centers are expected to confirm that their royalty accounts are within $0.06 of each other; some small discrepancy is expected due to rounding when WinMORE calculated royalty owed. 

When a market center discovers a larger discrepancy between the accounts 

• FR Paid by Associates – aligns with the AGT Royalty actually paid through WinMORE 
• Franchise Royalty – aligns with the TOT Royalty calculated as due by WinMORE 

Use the reports and review process below to discover the source of the discrepancy towards correcting it. 

Step 1: Subtract Franchise Royalty from FR Paid by Associates. 

This will tell you how much has been over or under-collected from associates so that you have an idea of the amount you are looking to reconcile. Keep in mind that this amount may be a combination of smaller amounts as well. 

Step 2: Pull your Transmittal Proof Report (WinMORE), Deposit Summary Report (WinMORE), and bank register ##/01 - ##/31. Check each entry to confirm 1) the deposit was pulled into your accounting system (AccountEdge/LoneWolf), 2) each deposit matches up between the three reports. This verification confirms that all deposits are recorded and recorded correctly.  

Step 3: Review your Royalty Exceptions Report and reconcile these items first.  

If you'll run this report along with the royalty anniversary report detail for all associates listed on it. Look for the DAs where the TOT and AGT columns don’t match; that’s the source of your exceptions in most cases.  

1. If the exception points to a CO$ Transfer DA, please review the Company Dollar Transfer articles and complete Step 6 (receiving) or Step 9 (sending) to clear the exception. 

1. Speak with the associate and/or team admin to learn what was unique about the transaction to cause a difference in royalty calculated (TOT) and royalty collected (AGT). 

Step 4: Pull your Royalty Anniversary Report detail for all A associates.  

Begin by checking that their TOT column matches their AGT column (this should match up with the folks on your exceptions report as well). Beyond that, confirm that each DA where TOT does not match AGT is correct and that royalty not collected truly matches the exceptions allowed by KWRI. This report may highlight some patterns in which kinds of transactions are being routinely missed for royalty, and we can use this to review KWRI policy and best practices. 

Remember: KWRI never waives royalty. If an undercollection (AGT is lower than TOT) occurs and is not one of the four allowable exceptions, the market center is still responsible for paying the royalty to KWRI on behalf of the associate; consult with your OP to determine whether you will expense that above line (reducing profit share) or below the line (reducing owner profit). 

When the discrepancy can be traced to one or a few individual associates, please reference How to Request a Franchise Royalty Adjustment for the next steps.