Standard Sales Based Sliding Scale (FR05.2)
Use Standard Sales Based Sliding Scale (FR05.2) to define a sliding scale for a standard sales based charge.
In the Franchise Management application, a sliding scale is an optional table that consists of a user-selected scale option, upper limits, and percentages used to calculate a sales based charge.
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Specify each upper limit of the scale along with the percentage of net sales for each step level. A step level is a line of a sliding scale that contains a monetary value for an upper limit of revenue and a charge percentage used to compute the associated sales based charge. An upper limit is a sliding-scale monetary value that represents a range in which contract net sales for the cycle must fall for the application to calculate the charge at the associated percentage.
If the scale option for the sliding scale is set to 1, for Use Highest Step Percentage, then, upon release, Sales Entry (FR20.1) computes the charge in the following way:
Sales Based Charge = Net Sales * highest defined Charge Percent + Base Amount
If the scale option equals 2, for Add Step Levels Together, the Franchise Management application computes the sales charge in the following way:
[(1st sales portion * 1st Charge Percent) + <(2nd sales portion * 2nd Charge Percent)> . . . + <(nth sales portion * nth Charge Percent)>] + Base Amount
Where 1st, 2nd, and nth sales portions are defined as follows:
1st sales portion = Amount of net sales that is less than or equal to the Upper Limit amount defined in the 1st step level of the sliding scale.
2nd sales portion = If applicable, Amount of net sales that falls between the 1st Upper Limit and the second Upper Limit of the sliding scale.
nth Net sales portion = Amount of net sales that falls between the next to the last defined Upper Limit and the last defined Upper Limit of the sliding scale.