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Franchising is licensing an outlet: an operator puts up the capital, runs the four walls under your name and your rules, and pays you a share of what it sells. Owning is the reverse. Both are normal, and seven of the nine sourced outlet decisions in this pack held in the structure they chose. What the room does is compare the two on the capital, as a sum to be released or a sum to be found, and that is the smaller number: at the company's own cost of money the charge for the capital in one outlet is a fraction of the margin the royalty hands over. The two figures that decide it are the ones almost no chain has. What a franchised outlet of yours sells against an owned one, like for like, is reported in two places and matched in none; what the operator keeps after paying you is in the operator's accounts and nowhere in yours, because a franchisor sees sales and never profit. This pack turns the decision into arithmetic. What an owned outlet sells, times what it keeps, less the field organization per outlet, less a charge for the capital at your own rate, is what an owned outlet earns; the royalty on what a franchised outlet actually sells, less what supporting the operator costs, is what a franchised outlet pays. The whole decision then reduces to one figure, the break-even sales gap, which is how much less a franchised outlet can sell before owning it pays, read beside what the operator keeps, because a structure that pays by taking the operator's return reverses. It stops on two halts: no one has matched the cohorts, and no one has seen the operators' accounts.
What is the Franchise Question Strategy Pack
The Franchise Question Strategy Pack is a complete decision-support kit for one question: own the outlets or license them, and what does each do to the thing customers came for? It is built around one organizing claim: the same outlet sells a different amount in each pair of hands, and the decision turns on that gap and on what the operator keeps, not on the capital. Sixteen files carry it: the foundations, a concept deck, a scored decision wizard, an outlet model blank and worked, the moves at each reading, nine sourced outlet decisions, a fit worksheet, a roadmap template, a practitioner manual, a field checklist, and an orientation page.
The test that runs through every file
whether an owned outlet earns more than a franchised one pays, at what each sells in each pair of hands, and whether the operator keeps enough to run it the way the customer expects. It is the argument in the deck, it becomes the wizard’s axes, it drives the model’s inputs, and it reappears as lines on the checklist. That is what makes 16 files a product rather than 16 documents.
The model resolves to one number you can negotiate with: The break-even sales gap — how much less a franchised outlet can sell before owning it pays. It ships blank and worked, and every input is a named cell rather than a figure buried inside a formula, so the number arrives with its assumptions attached rather than on its own authority.
Why the franchise vs company owned decision is not about the capital
Franchising is licensing an outlet: an operator puts up the capital, runs the four walls under your name and your rules, and pays you a share of what it sells. Owning is the reverse. Both are normal, and seven of the nine sourced decisions in this pack held in the structure they chose. What the room does is compare the two on the capital, as a sum to be released or a sum to be found, and that is the smaller number: at the company's own cost of money, the charge for the capital in one outlet is a fraction of the margin the royalty hands over.
The two figures that decide it are the ones almost no chain has. What a franchised outlet of yours sells against an owned one, like for like, is reported in two different places and matched in none. What the operator keeps after paying you is in the operator's accounts and nowhere in yours, because a franchisor sees sales and never profit. So the room compares a capital figure it has to an outlet figure it does not, and reaches a conclusion anyway.
This pack turns that into arithmetic. What an owned outlet sells, times what it keeps, less the field organization per outlet, less a charge for the capital at your own rate, is what an owned outlet earns. The royalty on what a franchised outlet actually sells, less what supporting the operator costs, is what a franchised outlet pays. Then the whole decision reduces to one figure: how much less a franchised outlet can sell before owning it pays.
Should we franchise our business? The four readings
| The reading | What it means | The first move |
|---|---|---|
| Owning pays more, and the operator would earn its return | You own because it earns more, not because you must. | State the break-even sales gap and what the capital must earn elsewhere, so the decision can be reopened by a number. |
| Owning pays more, and the operator would not earn its return | The system cannot be franchised at this royalty. | Stop selling franchises until an operator can earn a return inside the outlet. |
| Franchising pays more, and the operator earns its return | Franchise, and write the customer into the agreement. | Name price, hours, staffing, and refurbishment as controlled or not, and treat the most the operator can pay as a limit. |
| Franchising pays more, and the operator earns less than its cost of money | The reading that reverses: it pays by taking the operator's return. | Cut what you take, and read the sales gap next year. |
Only one of the four reverses, and it is the one a franchisor reaches by raising what it takes to make the paper work. One point of royalty is usually worth more than the whole measured sales gap, which is why it is the temptation, and why the pack carries the most the operator can pay as a limit rather than a target.
What is in the Franchise Question Strategy Pack
- Foundations. The framework: why the capital is the smaller number, the arithmetic of one outlet in each pair of hands, the seven levers, the four readings, and the ten conditions that stop the analysis.
- Concept deck. Twenty-four slides for a board or a franchise committee, with nine sourced outlet decisions and what each does not establish.
- Decision wizard. Eight scored questions returning the band, the weakest answer, and either of the two halt conditions.
- Outlet model. Eleven candidate sales gaps across the columns, in both directions, the break-even sales gap that decides it, and what the operator keeps.
- Strategies and tactics. The moves at each of the four readings, what to do when the model halts, and four ways to make the next outlet cheaper to judge.
- Case studies. Nine sourced outlet decisions — seven held, one reversed, one partial — and three records read beside them.
- Fit worksheet. The single page of record: what an owned outlet sells, keeps, and costs to open, the sales gap, what the operator keeps, and the break-even sales gap.
- Roadmap template. Five phases with gates and owners, the assumptions register, a reporting change and a periodic review line.
- Practitioner manual. Costing one outlet, matching the cohorts, the operators' accounts, the agreement, the board paper, six failure modes.
- Field checklist. The one-pager that survives outside the binder.
- About the package. What each file does and the order in which to run them.
Who the Franchise Question Strategy Pack is for
A chief executive with a refranchising paper on the table that states the capital and never the outlet; a chief financial officer being asked to approve a structure against a number no one has produced per outlet; a development director who has sold franchises for years and has never seen an operator's accounts; an operations director who runs the owned estate and suspects the franchised one sells less; a board member reading a royalty line that says nothing about the outlets; a private equity operating partner underwriting a chain whose earnings sit in a royalty stream; and the adviser who would otherwise start from a blank page. It is worth buying when a real decision is in front of you. It is not worth buying to read.
An honest note on fit
This is a kit for running a decision, not a research report and not a forecast. Worked examples use an explicitly fictional company with numbers tuned to teach rather than to flatter. In the worked case an owned outlet sells $2.6 million at a 13 percent four-wall margin, costs $1.4 million to open, and earns $112,000 a year after the field organization and a 9 percent capital charge; a franchised outlet sells 8 percent less and pays $91,600 at a 5 percent royalty. Owning earns $20,400 more per outlet, an operator would have to outsell the company's managers by 7.7 percent before that reverses, and the released capital would have to earn 10.5 percent elsewhere. The room came in with $294 million of capital to release; the page says that is the smaller number.
Framework content is the larger share of the pack and each page marks which is which. No record in the evidence compares what one outlet sells in each pair of hands inside a single chain, and none carries an operator's accounts, so both halts are figures you produce from your own records. Four limits are stated on the page rather than worked around. The model does not forecast the sales gap; it sweeps it in both directions because no one can settle it in advance. It prices one outlet in steady state and says nothing about the rate of growth each structure allows, which is frequently the real reason a chain franchises. It holds the royalty as a share of sales and does not model rent, supply margin, or fees beyond it. And it treats what the operator keeps as the guard on the outlet's quality, which is a mechanism the cases show rather than a measurement of the customer's experience.
Questions about the Franchise Question Strategy Pack
- What numbers does the outlet model produce?
- One headline and fifteen supporting rows. The break-even sales gap — how much less a franchised outlet can sell before owning it pays. Around it: what an owned outlet keeps before central costs, the capital charge per outlet, what an owned outlet earns, what a franchised outlet pays, the difference and which pays more, what the operator keeps before and after its capital, the operator's return on what it put in, the most the operator can pay, what the capital must earn elsewhere, the sales fall that turns it, the capital tied up in owned outlets, and what refranchising the owned estate would cost a year, in dollars and in years of profit. The Model tab sweeps the sales gap in both directions, and one row turns from Yes to No where franchising starts to pay.
- Our franchised outlets sell less than our owned ones. Does that settle it?
- Not on its own, and that is the point of the pack. In the worked case a franchised outlet sells 8 percent less and owning earns $20,400 more per outlet, so refranchising the 210 owned outlets would cost $4.28 million a year. But the operator keeps $287,040 before its capital, a 23 percent return, so the other structure was available and was not chosen — and one point of royalty would flip the per-outlet answer. The reading is to own because it earns more, and to put the break-even sales gap in the review so the decision can be reopened by a number.
- We do not know what our franchisees actually earn.
- Almost no franchisor does, because the royalty is charged on sales and the operator's profit is the operator's. It is a week: collect operators' accounts under the agreement where it gives you the right, by request where it does not, and read them for the margin before the royalty and what the operator put in. The manual sets out the method and what to do about the ones who refuse.
- Does this only apply to restaurants?
- No. It applies wherever an outlet can be run by the company or by an operator under its name: hotels, dealerships, retail stores, service centers, clinics, and fitness. Three of the nine cases are a hotel company, a heavy-equipment maker with independent dealers, and a payments network that decided which end of its own loop to own.
- Are the case studies real companies?
- Yes. Nine sourced outlet decisions: Yum Brands, McDonald's Dollar Menu, Chipotle, Subway, Hilton, McDonald's land model from 1956, Caterpillar, Apple Stores, and Starbucks in China. Each is dated, read through what was decided and what the company kept, and each states what its evidence does not establish. Starbucks in China is in the set to keep it honest: a company that owned every store and lost the premium anyway. The worked model, wizard, and worksheet use an explicitly fictional company, labeled as such on every file.
- Is this a subscription?
- No. One payment, one download, sixteen files, yours to keep and to use inside your organization under the license included in the pack.
- What is the Franchise Question Strategy Pack?
- The Franchise Question Strategy Pack is a decision-support kit for one question: Own the outlets or license them; what does each do to the thing customers came for? It contains 16 files — foundations, concept deck, decision wizard, outlet model, strategies and tactics, case studies, fit worksheet, roadmap template, practitioner manual, field checklist, about the package — built around a single organizing test: whether an owned outlet earns more than a franchised one pays, at what each sells in each pair of hands, and whether the operator keeps enough to run it the way the customer expects. It is what a leadership team uses to run the decision and leave a record of what they assumed, rather than a report about the topic.
- Who is the Franchise Question Strategy Pack for?
- Anyone who has to make this call and answer for it: an operator or owner facing the decision, the executive team running it, the board or investor testing the reasoning, or an adviser who would otherwise build the framework from a blank page. It is worth buying when a real decision is in front of you. It is not worth buying to read.
- What is in the Franchise Question Strategy Pack?
- 16 files in Word, PDF, PowerPoint and Excel: Foundations (Word + PDF) — The framework: why the capital is the smaller number, the arithmetic of one outlet in each pair of hands, the seven levers, the four readings, and the ten conditions that stop the analysis. Concept deck (PowerPoint + PDF) — Twenty-four slides for a board or a franchise committee, with nine sourced outlet decisions and what each does not establish. Decision wizard (Excel) — Eight scored questions returning the band, the weakest answer, and either of the two halt conditions. Outlet model (Excel, blank and worked) — Eleven candidate sales gaps across the columns, in both directions, the break-even sales gap that decides it, and what the operator keeps. Strategies and tactics (Word) — The moves at each of the four readings, what to do when the model halts, and four ways to make the next outlet cheaper to judge. Case studies (Word) — Nine sourced outlet decisions — seven held, one reversed, one partial — and three records read beside them. Fit worksheet (Word, blank and worked) — The single page of record: what an owned outlet sells, keeps, and costs to open, the sales gap, what the operator keeps, and the break-even sales gap. Roadmap template (Word) — Five phases with gates and owners, the assumptions register, a reporting change and a periodic review line. Practitioner manual (Word + PDF) — Costing one outlet, matching the cohorts, the operators' accounts, the agreement, the board paper, six failure modes. Field checklist (PDF) — The one-pager that survives outside the binder. About the package (PDF) — What each file does and the order in which to run them.
- What number does the Franchise Question Strategy Pack produce?
- The break-even sales gap — how much less a franchised outlet can sell before owning it pays. The model ships blank and worked, and every input is a named cell rather than a figure buried inside a formula, so the number you take into a room arrives with its assumptions attached and can be argued with rather than merely believed.
- How is the Franchise Question Strategy Pack delivered?
- As a single download of all 16 files, immediately after payment, with the same link sent by email. It can be downloaded 3 times and the link is valid for 30 days. There is nothing to install and no account to keep.