Multi-unit accounting: Business Central for franchises

Royalty and fee invoicing in Business Central for franchises

A franchisor earns mostly from royalties, brand fund gifts, tech fees and start-up fees. Each franchisee is a customer. Reported sales arrive from the till system or a portal. A routine then creates sales invoices, with the royalty worked out from the agreed rate.

You post brand fund contributions to a separate fund dimension. So the franchisor can show franchisees how the money was spent. Start-up fees that you spread over the agreement use deferral templates. Direct debit works through payment export or an add-on.

One company per legal entity in Business Central for franchises

Multi-unit operators often put each location, or a small group, in its own company. Each entity becomes a company in one environment. A setup package holds the standard chart of accounts, posting groups and dimensions. So a new unit starts from the same base as the others.

Where several stores share an entity, a store dimension separates them. Users switch companies with one sign-in. Permissions keep a store manager in the right company. You can also keep shared vendors and accounts the same across companies.

Shared services and intercompany charges

A management company often pays the payroll, insurance, marketing and supplies for the units. Intercompany journals post the charge in the paying company. They also post the matching entry in each unit. So due-to and due-from balances agree across the whole group.

Allocation accounts spread one shared invoice across units. They use fixed shares or a driver such as sales. A central payables team can pay vendors for every entity, while each company keeps its own ledger. At period end, eliminations run as part of consolidation.

Daily sales from the point of sale

Franchise brands normally require one till system. It stays in place. Each night, a summary by store arrives in Business Central. It shows sales, discounts, taxes, tenders and gift cards. The entry posts as a journal with the store dimension.

Bank reconciliation then matches deposits and card settlements against those tender totals. So a missing deposit shows up quickly. Purchases from approved suppliers flow through payables. Recipes and food cost usually stay in the brand's back-of-house tool.

Comparing units with Business Central for franchises

The value of a network view is comparison. Every unit shares accounts and dimensions. So a Power BI report can line up labor, food cost and rent as a share of sales for each store. It can also flag the outliers. Same-store trends separate real growth from new openings.

Consolidation brings the entities together for lenders and investors. It also removes intercompany balances. Franchisors can also collect franchisee results in one layout. We build the first reports with your operations leaders. So the measures match how they already judge a store.

Business Central for franchises: questions from owners

Do we need a separate Business Central license for each company?

No. Users are licensed per person, not per company, and one environment can hold many companies. A user with the right permissions can work in any of them. So a regional controller can move between stores without a second login. Microsoft publishes the current license terms and prices on its site, and we count your users by role.

Can Business Central calculate royalties automatically?

Once reported sales are in the system, the math is easy to run each month. A small extension or a Power Automate flow reads each franchisee's sales. It applies the rate from their agreement and creates the invoice. Tiered or minimum royalties work in the same routine. So the royalty run takes minutes, and the invoices match the contract.

What is involved in adding a new location?

An administrator creates the company and applies the template package. Then come bank accounts, opening balances, users and the sales import for that store. We document the steps. So your own team can open later units without calling us. A new store then starts from the same chart, the same dimensions and the same reports as the rest.

Does it work with our franchisor's required POS?

Almost always, as long as the point-of-sale system can export daily totals or offers an API. We build an import that maps its categories and tenders to your accounts. The point of sale remains the system of record for individual tickets. So Business Central holds the totals, and the till keeps the detail it was built to hold.

Can franchisees and the franchisor share one system?

They can, but usually should not share one environment. They are separate businesses with private data. Each party runs its own Business Central, and royalty data moves between them by file or API. A franchisor may also offer franchisees a preconfigured template. That helps new owners start fast, and it makes network reporting easier.

Where Business Central for franchises leads next

The three service pages below explain company setup, intercompany and consolidation. Restaurant franchisees will also find the restaurants page useful for the point-of-sale and commissary side. Start with the page that matches your structure. Then ask us how Business Central for franchises can fit your network. For the product detail, see Microsoft Learn: managing intercompany transactions.