In this guide 6 sections
Company owned outlets sit inside your books, so you consolidate their sales, costs and stock line by line. Franchised outlets are separate businesses. They report sales, you invoice royalty and marketing fees, and you audit compliance. A mixed network needs both views in one system without blending them.
Owned outlets are your own ledger
A company owned outlet is a branch of your legal entity. Its takings, wages, rent, utilities and stock purchases all land in your accounts. Finance consolidates them into one profit and loss, with each outlet as a cost centre. The consolidation also eliminates transfers between your own outlets, so a tray moved from one shop to another never counts as a sale.
That means you need depth. Think daily cash-up, supplier bills, payroll, depreciation on equipment, stock write-offs. The head of finance wants to trace any figure back to a document. Every one.
Reporting runs on your calendar. Month-end close, audit schedules and board packs all depend on every owned outlet posting on time. Small point, big effect. Owned outlets close their books. Franchised ones do not.
Franchised outlets report up, they do not post in
A franchisee owns the business, the lease and the staff. You see only what the agreement requires. Usually that is gross sales by period, sometimes by product group, sent from their till. Nothing more.
From those sales you raise the royalty invoice and the marketing fund contribution. Then you chase payment. Unpaid royalty, late sales reports and disputed adjustments are the daily work of a franchise finance desk.
You do not see their rent or wages, and you should not. Asking for them creates friction and legal questions the franchise agreement may not cover. If a franchisee shares a cost, such as a delivery partner commission, record it as a reported figure and keep it out of your ledger.
- Gross sales feed from the franchisee till
- Royalty and marketing fund invoicing
- Opening fee and renewal fee schedules
- Ageing of unpaid fees by franchisee
- Audit rights and sales verification
Side by side, the differences that bite
Stock is the clearest split. Owned outlets draw from your warehouse and the cost is yours. Franchised outlets buy from approved suppliers or from you at a transfer price, and the sale is an invoice. Think of the transfer price as your revenue and their cost of goods.
Menus and prices behave differently as well. You set them for owned outlets. For franchised ones you may only recommend prices, depending on local law and the agreement.
Compliance checks differ. An owned outlet gets an internal audit. A franchised outlet gets a brand standards visit, scored on a checklist, with a corrective action list. None of this is unusual. It turns into a problem only when a single report tries to serve both. That is the trap.
- Revenue: full sales versus fee income
- Costs: consolidated versus not visible
- Stock: group inventory versus supplier invoices
- Staff: payroll runs versus brand training records
- Oversight: internal audit versus standards visit
What a mixed network needs from a system
The first need is a flag on every outlet saying owned or franchised, driving which reports and which permissions apply. A franchisee must never see another franchisee’s sales.
The second is two money flows kept apart. Owned outlets post into your ledger. Franchised ones generate receivables. Mixing them inflates revenue. It breaks the group accounts.
The third is one brand dashboard. Same-store sales, average cheque and complaint counts compare across both types, while cost reports only cover owned sites. Permissions matter too. A franchisee logs in to see only their own sales, invoices and visit reports.
Choose the model you report on first
Many brands start owned, then franchise once the playbook is proven. Others convert a struggling owned outlet to a franchise. The reporting must survive that switch without losing history.
Ask your finance team a plain question. If tomorrow an owned outlet became franchised, how long would it take to change its reports and invoices? Include the franchisee portal logins, the fee schedule and any open invoices in your answer.
Write down every report you send today, tag each as owned, franchised or both, and take that list to your next software demo.
Owned versus franchised reporting map
Report names run down the side of a single sheet, with three columns across: owned outlets, franchised outlets and brand level. Mark each cell collect, invoice, audit or not visible. Rows include daily sales, cost of goods, payroll, royalty invoice, marketing fund, standards visit score, stock transfer and ageing of fees.
Open a blank worksheet to printQuestions owners ask
Do franchised outlets appear in group accounts?
Usually only as fee income and receivables. The outlet’s own costs and profit belong to the franchisee. Your accountants confirm treatment for your country and structure.
Can one system handle owned and franchised outlets together?
Yes, if every outlet carries a type flag that controls ledger posting, invoicing and who can see what. Without that flag the two models get mixed in the same reports. Have each vendor demonstrate this split live, using one owned and one franchised outlet.
What sales data should a franchisee send?
Whatever the franchise agreement names, usually gross sales by day or week, sometimes by product group. Feeding it automatically from the till beats a monthly emailed spreadsheet.
How do we verify franchisee sales?
Compare reported sales with till exports, supplier purchase volumes and online order records. Your agreement should grant audit rights. Software can flag gaps worth a visit. Treat an unexplained gap as a reason to talk first, then to visit.