Franchise Owners
Franchise owners managing royalty fees, multi-unit financials, and franchisor reporting across fast food, fitness, service, and retail locations.
The Industry
Franchise ownership looks simpler than starting from scratch. Someone else built the brand, the systems, the supply chain. But the financial side introduces complexity that independent businesses don’t deal with. You owe royalties on gross revenue, not profit. That distinction matters. A location generating $80,000 in monthly revenue with a 6% royalty and 2% ad fund contribution sends $6,400 to the franchisor before you pay a single employee or cover rent. Your actual margin lives in what’s left after those mandatory fees, labor, cost of goods, and occupancy costs.
The franchisor also controls much of what you spend money on. Required suppliers, approved equipment vendors, mandatory technology platforms, periodic remodels or upgrades. These aren’t optional expenses you can shop around for. They’re contractual obligations baked into the franchise agreement. And most franchisors expect financial reporting in their format on their timeline. Your books need to produce those reports accurately and consistently, which means your chart of accounts and how transactions get categorized has to be set up with franchise requirements in mind from the start.
Who This Covers
Who This Covers
Fast food and restaurant franchise owners, fitness center franchisees, service-based franchises like cleaning or home repair, and retail franchise locations. Single-unit operators and multi-unit owners across Long Beach, the South Bay, and Greater LA.
What Makes It Different
What Makes It Different
Royalty fees calculated on gross revenue regardless of profitability. Ad fund contributions that are mandatory, not optional. Required vendors you can’t negotiate away from. Franchisor-mandated financial reporting formats and deadlines. Multi-unit owners needing separate books per location while also seeing the consolidated picture. Franchise agreement renewal costs and remodel requirements that arrive on someone else’s schedule.
What We Handle
Royalty fees, ad fund contributions, technology fees, and other franchise-mandated costs get tracked as separate line items so you can see exactly what goes to the franchisor each month. Revenue gets recorded accurately because royalty calculations are based on gross sales, and even small errors in revenue reporting compound over time. If the franchisor requires monthly or quarterly financial reports, your books are structured in QuickBooks Online to produce those without extra work or reformatting. The goal is that compliance with franchisor expectations becomes part of the normal bookkeeping process, not a separate scramble.
For owners with multiple locations, each unit gets its own profit and loss statement. You can see which location is carrying its weight and which one is falling short. Labor costs get tracked as a percentage of revenue per location because that’s typically the largest controllable expense in a franchise. Vendor payments to required suppliers get organized. Equipment depreciation, leasehold improvement amortization, and initial franchise fee amortization are handled properly over the right periods. Invoicing and bill payment stay on schedule so nothing falls through the cracks during busy stretches.
Royalty and Fee Tracking
Royalty and Fee Tracking
Every franchise-specific cost gets its own category. Royalties, advertising fund contributions, technology platform fees, training fees, renewal costs. You see the total cost of the franchise relationship clearly each month instead of having those fees buried in general expense categories where they’re easy to overlook or misunderstand.
Multi-Unit Financial Reporting
Multi-Unit Financial Reporting
Each location tracked separately with its own revenue, expenses, and profitability. Consolidated reports that roll everything up when you need the full picture. Labor cost ratios, cost of goods, and occupancy costs compared across units so you can spot trends and problems at the individual location level before they spread.
What Goes Wrong
Multi-unit owners often start with one location and add the second or third into the same QuickBooks file without proper separation. Revenue and expenses blend together. You think Location B is profitable but half its supply costs are sitting under Location A because an invoice got categorized to the wrong class or the vendor account wasn’t split correctly. When it’s time to decide about renewing a lease or investing in a remodel, the numbers don’t tell you anything useful because they were never properly separated. Cleaning that up after two or three years of blended data is expensive and frustrating.
Franchise fees are another area that gets mishandled. The initial franchise fee should be amortized over the life of the franchise agreement, not expensed entirely in year one. Royalty calculations based on gross revenue mean that if refunds, discounts, or voided transactions aren’t recorded correctly, you could be overpaying royalties without realizing it. Or underpaying, which creates problems during a franchisor audit. Labor costs creep up quietly too. A few extra hours of overtime here, an extra shift there. Without tracking labor as a percentage of revenue at least monthly, you won’t notice until the quarterly numbers come back and margins have shrunk by several points with no clear explanation.
Locations Blended Together
Locations Blended Together
Revenue and expenses mixed across units making it impossible to evaluate individual location performance. Supply purchases assigned to the wrong location. Shared costs like a manager overseeing two sites not allocated properly. The consolidated numbers look fine but the location-level detail is meaningless because nobody set up the tracking correctly from the beginning.
Fees and Labor Mismanaged
Fees and Labor Mismanaged
Initial franchise fees expensed in one lump instead of amortized over the agreement term, distorting that year’s tax picture. Royalty overpayments from inaccurate gross revenue figures that nobody caught. Labor costs running above target percentages for months before anyone notices. Mandatory remodel or upgrade costs not planned for because the franchise agreement timeline wasn’t being tracked against actual financials.
What Changes
Each location stands on its own in your financial reports. You can compare revenue, labor percentage, cost of goods, and net profit across units without guessing. Franchise-specific costs are clearly separated from operating expenses, so you see what goes to the franchisor and what stays in the business. When the franchisor asks for financial reports or conducts an audit, the data is already organized in the format they need. That interaction becomes routine instead of stressful.
You start making decisions based on numbers that actually reflect what’s happening. Renewing a lease becomes a calculation, not a gut feeling. Opening another location gets evaluated against real performance data from your existing units. Labor scheduling gets informed by actual cost-to-revenue ratios instead of instinct. Tax preparation captures franchise fee amortization, equipment depreciation, and leasehold improvements that franchise owners commonly miss or handle incorrectly. The books become something you use to run the business, not just something that gets handed off to your accountant once a year.
Location-Level Visibility
Location-Level Visibility
Every unit shows true profitability after royalties, labor, cost of goods, and occupancy. Underperforming locations get identified early with specific data showing where the problem is. High performers get studied so you can replicate what’s working. Expansion decisions are grounded in what your current locations actually produce, not projections based on incomplete numbers.
Decisions Backed by Real Numbers
Decisions Backed by Real Numbers
Franchisor reporting handled as part of normal bookkeeping instead of a separate project each quarter. Labor costs tracked against revenue targets so you can adjust scheduling before margins erode. Franchise agreement timelines tracked so renewal fees and required upgrades don’t catch you off guard. Financial statements that are clean, current, and useful for both you and your accountant at tax time.
Long Beach's Trusted Bookkeeping Partner
The Next Step:
A Quick Discovery Call
Tell us where things stand with your books. We'll listen, ask a few questions, and give you a clear quote to get it handled.
