Restaurant franchise accounting Accounting for Shipley Do-Nuts franchisees. A 5% royalty, a 1% co-op, and 2% you spend yourself.
Shipley Do-Nuts charges a 5% royalty and a 1% regional marketing co-op, and requires franchisees to spend another 2% on local store marketing that Shipley does not collect. The first two are payments to the brand; the third is a spending obligation you have to be able to prove. Kite keeps those rules for Shipley operators.
Operators of this brand run their back office on Kite
What the Shipley Do-Nuts agreement charges
| Fee | Amount | Charged on | When |
|---|---|---|---|
| Royalty | 5%[1] | Sales, as the agreement defines them | Per the franchise agreement |
| Regional marketing co-op | 1%[1] | Sales | Collected with the royalty |
| Local store marketing | 2%[1] | Sales | Spent by the franchisee; not collected by Shipley |
The rules that change the books
The 2% you have to show
Local store marketing is an ongoing required spend that Shipley does not collect[1]. It needs its own account and a running total against 2% of sales, so a store can show it met the requirement without rebuilding a year of receipts.
Cash, every day
Where a store takes cash, each day’s cash needs counting, depositing and matching to the bank. A short deposit found at month end is a month-old conversation; found the next morning, it is a store and a day.
Where Shipley Do-Nuts books go wrong
The cash deposit that does not match the day
Cash over and short is normal in cents and a problem in hundreds. Matched daily, a short deposit names the store and the day; matched monthly, it is an unexplained variance on the P&L.
Local marketing coded to the wrong place
Flyers, sponsorships and local ads coded to general advertising, supplies or donations make the 2% requirement impossible to evidence. One account, used the same way at every store, makes it a report.
The day restated after the royalty was paid
An offline register syncs late, a void is processed the next morning, and a day already reported to the franchisor changes. The difference belongs on the next royalty payment as its own line, not in an edit to the one already debited.
Questions
Questions Shipley Do-Nuts operators ask.
Can we show we met the 2% local marketing requirement?
Local marketing is booked to its own account at every store, the same way everywhere, so spend against 2% of each store’s sales is a report your accounting lead runs rather than a year of receipts to rebuild.
How does Kite handle cash deposits?
Each day’s cash sales from the register are matched to the deposit that reaches the bank, store by store, and a deposit that is short or missing is raised the next morning with the store, the day and the amount.
Can we start with a few shops?
Yes. Two to five locations through one full month-end close, beside your current bookkeeper, at the same price.
Sources
- [1]FAQs about opening a Shipley Do-Nuts franchise — Shipley Do-Nuts · the franchisor’s or a filer’s own document
Start with a few stores.
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