How do I Manage Fees?
Navigate to Dashboard -> Royalties -> Manage Fees to manage royalty fees at the corporate level. Here, corporations can create, edit, and delete different royalty fee types.
You can connect different Stripe accounts to each royalty fee type to ensure proper payment processing and flexibility.
What are the Royalty fee types?
Percentage Fees Charged at Source:
This fee is collected as part of the application fee during a payment transaction. The fee first reaches the Momence platform's Stripe account, where it is processed in USD. From there, it is transferred directly to the target corporate Stripe account. The transfer delay can vary depending on the underlying transaction status, ranging from almost immediate to up to 7 days.
If either the franchisee's account (source account) or the franchisor's account (target account) operates in a currency other than USD, two currency conversions may occur:
The fee is converted to USD when it reaches the Momence platform's Stripe account.
The fee is converted again when transferred from the Momence platform's Stripe account (USD) to the franchisor's target account in their local currency.
These conversions, processed by Stripe, apply the current exchange rates and may impact the final amount received by the franchisor.
Interval Percentage Fees:
Similar to percentage fees charged at source, but instead of being deducted immediately, these fees are debited from the franchisee's bank account in a batch at specified intervals (e.g. monthly).
One-Off Fees:
A single, non-recurring fee charged at a specific time, processed via direct debit.
Constant Interval Fees:
Fixed fees are charged at regular intervals (e.g., weekly or monthly), and processed via direct debit.
Note that all fees except for Percentage Fees Charged at Source are processed using direct debit, which can take several days to complete due to the nature of the payment method.
Enable Fees for Franchisees
Navigate to Dashboard -> Franchisees -> Franchisee Detail to enable a selected subset of existing royalty fees for a specific franchisee.
Fees can be enabled immediately or scheduled for later activation, allowing for flexibility in managing when the fees take effect.
Even when the fee is inactive, franchisees can still set up their bank account connection (see the next section Stripe Accounts - For Franchisees). This allows them to be prepared for the fee activation when it occurs, ensuring a smooth transition once the fee becomes active.
For Percentage Fees Charged at Source, franchisees do not need to connect a bank account, as these fees are collected directly during payment. For other fee types, franchisees must connect their bank accounts, which may need to be connected multiple times if multiple Stripe accounts are used.
Stripe accounts
For Corporations
Corporations can connect either an existing Stripe account or create a new one. At least one Stripe account must be connected before setting up a royalty fee. Each royalty fee can be linked to a different Stripe account for flexible payment management.
U.S. Corporations (USD Currency):
A single Stripe account can be used for all royalty fee types.
Other Corporations:
One Stripe account must be connected for percentage-based royalty fees charged at the source, and another must be connected for all other royalty fee types.
This setup ensures compliance and smooth payment processing.
Dashboard -> Settings
For Franchisees
Franchisees must connect their bank accounts to all corporate Stripe accounts. However:
For percentage-based royalties charged immediately at the source, connecting a bank account is unnecessary, as these fees are deducted directly before the payment reaches the franchisee’s account.
For other royalty fee types, bank account connections are mandatory, and the same account may need to be connected multiple times if multiple Stripe accounts are used.
In case multiple royalty fees share the same corporate Stripe account, connecting a bank account to one fee would automatically connect the account to other fees.
These steps ensure seamless royalty fee collection across all scenarios.
Settings -> Administrative -> Franchise setup
FAQ's
What do the various fee collection status terms mean, such as "Pending transfer," "Pending payment," etc.?
Here's an explanation of each status related to fee collection:
Failed: The fee collection process has encountered an error or issue and was not successfully completed. This could be due to insufficient funds, account issues, or other errors in the payment process.
Succeeded: The fee collection has been completed successfully, and the amount has been transferred as intended.
Pending: The fee collection is in progress. This status typically resolves to either failed or succeeded shortly, depending on the outcome of the transaction.
Pending Transfer: A fee (such as percentage royalties or constant interval royalties) has been scheduled for transfer but has not yet been processed. This means the fee is ready to be moved, typically at the next available transfer cycle.
How can I stop a payment if there's an error and I need to prevent a royalty fee from being collected?
For Direct Debit Transactions (all interval-based fees, one-off fees):
Once a direct debit transaction has been initiated, it cannot be stopped in the middle of the process. You will need to wait for the transaction to complete. Once it has been processed, you can issue a refund directly from the Stripe dashboard (note: this action is not yet supported within the Momence app).
For Percentage Royalties Charged at Source:
Each transfer (from the Momence platform Stripe account directly to a corporate Stripe account) can be refunded separately from the Stripe dashboard. The funds will first be refunded to the Momence platform Stripe account. After that, Momence will process the refund to the franchisee.
For the 7-day cycle they set, does the cycle end exactly at the time of day it started, or does it end at midnight on the day after the end of the cycle?
When a fee is activated for a franchisee, the transfer is scheduled by adding the given interval (such as 7 days) to the current time at the moment of activation.
For example, if a fee is activated on 11/03/2024 at 6:55 PM ET, the 7-day cycle for calculating fees would be:
This means the cycle is not based on the start of the day in the franchisee's time zone but is calculated exactly from the time of activation (i.e., 6:55 PM ET in this case) and ends 7 days later at the same time of day, adjusted for UTC.
What is the recommended way for a franchisor to adjust the start/activation time so that it starts/ends at 00:00 in their local time zone?
Currently, we do not support specifying the fee cycle's exact start/end time. The only way to achieve a specific start time (such as 00:00 in the local time zone) is to activate the fee at the desired time manually.
For all fee types except percentage-based royalties charged at the source, the charging mechanism ensures that unprocessed royalties are collected in the next available batch. So, if a fee isn’t applied during a given cycle, it will be included in the next one. However, percentage-based royalties charged at the source cannot be retroactively collected. If a fee is deactivated and then re-activated, any transactions made while the fee is inactive will not have the royalty applied to them. These royalties will not be recovered once the fee is re-activated.
Note: To avoid losing royalties, it's important to carefully manage the deactivation and reactivation timing, ensuring that fees are active for all relevant transactions.
What would happen if the Franchisor changes the Stripe account associated with one of their configured fees after they have already assigned the fee to franchisees?
If a corporation changes the Stripe account associated with one of their configured fees, the franchisee will need to reconnect their direct debit account to the new Stripe account for that particular fee.
During the period when there is no connected account, royalties will not be processed. However, the fees are safely stored and will be processed once the franchisee reconnects their account to the new Stripe account.
Important: No fees will be lost during this time. They will be collected once the account is reconnected, ensuring there is no loss of fee collection for the franchisor.