---
title: "Royalty and advertising accrual review"
sidebarTitle: "Royalty and advertising"
description: "Reviewing the store-level royalty and advertising accrual, exception rates, and the new-store trap that produces a silently missing accrual."
icon: "percent"
---

> **For AI agents:** the complete documentation index is at [llms.txt](/llms.txt). Append `.md` to any page URL for its markdown version.

Calculated **by store**, based on store-level sales and each store's applicable royalty and advertising percentage.

<Info>
  **Source:** `Rackson_RRS_RCY_Review_Process.docx` sections 22 and 27.6.
</Info>

## Rates vary by store

Most locations run at the standard rate, but:

- **A handful of legacy locations run at a different percentage** — for example some at roughly half a percent above or below the standard rate.
- There have historically been **additional quarterly advertising initiatives layered on top** for some locations.

| Concept | Royalty | Advertising |
|---|---|---|
| **RRS** (Burger King) | 5% of net sales (acct 22400) | 4% of net sales (acct 22600) |
| **RCY** (Dave's Hot Chicken) | 5% of net sales (acct 22400) | **3%** of net sales (acct 22600) |

## The new-store trap

<Warning>
  **Watch specifically for new stores opening mid-period.** They must be added into the sales/royalty worksheet, or their royalty and advertising accrual will simply be **missing rather than flagged as an error.**

  Nothing in the workbook detects an absent store — this is why the check is a manual completeness step rather than a variance review.
</Warning>

## Step-by-step checklist

<Steps>
  <Step title="Confirm every open store is present">
    On the sales/royalty worksheet — **including any new stores that opened mid-period.**
  </Step>
  <Step title="Confirm each store's percentage is current">
    Including any legacy or exception rates.
  </Step>
  <Step title="Calculate the accrual and compare period-over-period">
    For reasonableness.
  </Step>
  <Step title="Investigate and raise unexplained swings">
    Any swing not explained by a **known rate difference** or a **new/closed location** should be raised with the client.
  </Step>
</Steps>

## RCY (Dave's) — the same structure

Similar schedule structure to RRS: calculated by store based on sales and each store's applicable percentage.

<Note>
  **Three or four DHC stores run at a different percentage** than the standard rate — for example some at roughly half a percent higher. Additional quarterly advertising initiatives have historically been layered on for some locations, though these have **become less frequent recently.**
</Note>

<Frame caption="Royalty and advertising worksheet for RCY (Dave's), showing store-level percentage detail">
  <img src="/images/customers/rackson/review-process/image14.jpg" alt="RCY royalty and advertising worksheet with per-store percentage columns" />
</Frame>

<Note>
  On the close checklist, the **Royalty / Advertising Accrual** is a **WD2** task, alongside posting sales in Intacct and the Coke/RSI rebate accrual.
</Note>

## Related

- [RRS taxes and royalties workpapers](/internal/customers/rackson/workpapers/rrs-taxes-and-royalties) — the 22400/22600 preparer steps and the BKC invoice matching
- [RCY sales and revenue workpapers](/internal/customers/rackson/workpapers/rcy-sales-and-revenue) — the RCY accrual, including the 3% advertising rate
- [Troubleshooting](/internal/customers/rackson/review-process/troubleshooting) — "a new store's numbers look wrong"