Industries / Franchise & Multi-Unit
Eleven units. One consolidated P&L. And no idea which three are carrying the others.
Per-unit economics, multi-entity consolidation, royalty and ad-fund accounting, and the franchisor reporting package — produced from one set of books instead of eleven spreadsheets.
At a glance
- Reported per unit
- Four-wall contribution and full P&L by location
- Consolidation
- Multi-entity with intercompany eliminations
- Franchise accounting
- Royalties, ad fund and technology fees, reconciled
- Franchisor reporting
- Their format, their deadline, every period
Multi-unit specifics
What changes when you pass unit three
Per-unit P&Ls
Every location gets a real profit and loss statement, not an allocation of the group total. Weak units become visible in weeks, not at year end.
Multi-entity consolidation
Separate LLCs per unit consolidated with intercompany eliminations, shared-service allocations and a clean group view.
Royalty and ad-fund accounting
Royalties, marketing contributions and technology fees accrued and reconciled against the franchise agreement rather than estimated.
Franchisor reporting packages
The reporting your franchisor requires, in their format, on their deadline, without a scramble each period.
Unit-economics benchmarking
Cost lines compared unit against unit and against comparable operations, so an outlier gets a reason attached to it.
New-unit modelling
Pre-opening budgets, ramp assumptions and the cash requirement for the next location, built from your own unit history.
The view
Unit contribution, ranked
| Unit | Net sales | Prime cost % | Four-wall contribution | vs. group median |
|---|---|---|---|---|
| Downtown | $2,410,000 | 62.1% | $392,000 | +4.2 pts |
| Harbor | $1,980,000 | 64.8% | $271,000 | +1.1 pts |
| Midtown | $2,120,000 | 66.0% | $248,000 | median |
| Riverside | $1,640,000 | 70.4% | $96,000 | −5.7 pts |
Illustrative figures. Variance uses semantic colour — green and red mean direction, never brand.
Franchisee and independent group
Two layers most multi-unit books never separate
Whether you operate a franchise or an independent group, the reporting problem past unit three is the same: the consolidated number averages away the thing you needed to see. Franchising adds a second layer on top of it.
The royalty base is not your sales line
Franchise agreements define the revenue base royalties and advertising-fund contributions are calculated on, and that definition rarely matches gross sales as your P&L reports them. Categories get excluded, others get added back, and the difference compounds every period it goes unreconciled.
We calculate on the contractual base, accrue in the period the sales occurred, and reconcile against what the franchisor actually drew — because underpayment is a compliance exposure and overpayment is not usually refunded unless you ask.
Two calendars, one set of books
The franchisor reports on their calendar in their format. You need to manage on four-week periods or 4-4-5 quarters so a five-Saturday month does not read as growth. Running these as two separate exercises is how groups end up with two versions of the truth.
We close once, on your calendar, and produce the franchisor package from the same ledger — so a unit figure, the group figure and the number the franchisor sees always reconcile to each other.
For the mechanics behind this — which lines consolidate, which eliminate, and how to allocate group overhead without misreading which location is weakest — see our guide to multi-unit restaurant accounting and consolidated group reporting.
Common questions
Before you ask
What is different about restaurant franchise accounting?
Two things a standard multi-location setup does not handle. Royalty and advertising-fund contributions are usually calculated on a defined revenue base in the franchise agreement, and that base is rarely the same as total sales on the P&L — it typically excludes some categories and includes others. And the franchisor requires reporting on their calendar and in their format, which will not match the calendar you actually want to manage the business on. We run both without maintaining two sets of books.
Can you produce per-unit P&Ls and a consolidated group view?
Yes, and they are the same close rather than two exercises. Each location carries its own entity or class with directly attributable costs, shared overhead allocated on a stated basis, intercompany balances eliminated, and a consolidated statement produced from the same underlying ledger — so a unit number and the group number always reconcile.
How do you handle accounting for multi unit restaurants that are not franchises?
The same mechanics apply. Independent groups need per-unit contribution, allocated overhead and consolidation just as franchisees do; they simply have no royalty or ad-fund layer and more freedom over the period calendar. Most of the groups we work with are independent multi-unit operators rather than franchisees.
At what point does a group need this?
In practice it is around the third or fourth location, when the owner can no longer hold each unit's performance in their head and the consolidated P&L starts averaging away the problems. Before that, a strong single-unit close is usually enough. After it, the group number actively conceals which units are carrying the others.
Do you handle royalty and ad-fund reconciliation?
Yes, calculated on the contractual base rather than on gross sales, accrued in the period they relate to, and reconciled against what the franchisor actually drew. Underpayment creates a compliance exposure and overpayment is rarely refunded voluntarily — both are worth catching in the period.
Can you deal with different entities and different states?
Yes. Separate entities per location with their own payroll registrations, state filings and rate tables, consolidated at group level with intercompany eliminations. Sales tax runs the same way, and a group crossing a state filing-frequency threshold in one location changes that location’s obligations alone — see sales tax reconciliation.
Also: restaurant accounting · the consolidated group pack · CFO & controller · New York
Which of your units is actually funding the others?
Bring a consolidated P&L. We will show you what per-unit reporting would reveal.