Virtual CFO for Franchise Groups in Sydney
A virtual CFO for Sydney multi-unit franchisees: unit economics after royalties and marketing levies, the roll-up view, and the next-site decision.
A multi-unit franchisee lives on the margin left after the franchisor takes its cut, and that cut is charged on gross sales whether the unit makes money or not. Run several units and the group P&L can look healthy while one or two sites quietly lose money below the royalty line. This is a virtual CFO’s view of the numbers that run a multi-unit franchise group, written for the franchisee, not the franchisor.
Published: July 2026
A franchisee buys a proven system and pays for it continuously. The two ongoing costs that define franchise economics are the royalty and the marketing levy, and both are charged on gross sales rather than profit. In Australia, royalty rates typically run 4 to 9 per cent of gross revenue, with marketing levies adding a further 1 to 4 per cent. Taken together, combined ongoing franchisor fees commonly total 7 to 12 per cent of gross revenue across the major Australian categories.
The critical feature is that royalty rates and marketing levies are charged on gross sales, not net profit, so the fees apply regardless of store profitability. That single fact reshapes how a franchisee has to think about margin, and it is where a virtual CFO engagement for a franchise group begins. The multi-site discipline overlaps heavily with designing a multi-site P&L.
The number that matters is unit contribution after royalties and levies. Build each site’s P&L down to the sales it generates, subtract the costs it controls (labour, rent, cost of goods, local costs), and then subtract the royalty and marketing levy charged on its gross sales. What is left is the site’s true contribution, the money it makes for you after the system has taken its share.
Because the franchisor’s cut comes off the top, a site with thin operating margins can be pushed close to breakeven by a combined fee of ten per cent or more on gross. A site turning over $1.2M with a combined franchisor fee of 10 per cent is handing over $120,000 a year off the top, before rent, wages, or stock. Whether that site is worth running depends entirely on what remains after that, and the only way to know is to build the unit economics with the fees where they actually fall.
Run several units and the same principle applies at group level. Each site has its own contribution after the franchisor’s cut, and the group result is the sum of those contributions less your head office cost, the area manager, the group admin, your own time. Built this way, the roll-up shows which units carry the group and which are along for the ride.
The common and dangerous pattern is a group where one or two strong sites subsidise one or two weak ones, and the blended result looks fine, so nobody confronts the weak sites. A group P&L built site by site, after fees, makes the subsidy visible and turns “we are doing okay overall” into a specific decision about each underperforming unit: fix it, renegotiate its terms at renewal, or exit it.
Multi-unit franchisees grow by opening or buying more units, and the biggest financial decisions they make are which sites to add. Franchisor projections are optimistic by nature; the franchisee needs their own model. A proper next-site model takes the real contribution profile of your existing sites, after royalties and levies, and applies it to the new site’s expected sales, rent, and ramp period, so you can see what the site needs to achieve to be worth the capital and how long it should take to get there. This is where a virtual CFO earns its keep for a growing franchisee: turning the franchisor’s glossy projection into a number you can actually underwrite.
The natural fixed-scope deliverable is a unit economics and multi-site P&L build that shows contribution by site after the franchisor’s cut and rolls up to a group view, or a 13-week cashflow forecast across the group. Either is a 90-Day Number engagement at a fixed $17,850 plus GST, delivered by day 90 and yours to run as you add sites. The franchise-specific economics build on the general franchise unit economics approach.
Past roughly $25M in group revenue, or a large network of units needing daily financial control, a full-time finance lead makes sense. Below that, the franchisee needs the unit economics and the next-site model built well, plus a reporting rhythm, rather than a full-time hire. A project-based virtual CFO delivers those. Tax structuring of the group and any franchise-agreement terms are for your accountant and lawyer respectively; the CFO work is the decision economics.
How much of my sales go to the franchisor?
In Australia, royalties typically run 4 to 9 per cent of gross revenue and marketing levies a further 1 to 4 per cent, so combined ongoing franchisor fees commonly total 7 to 12 per cent of gross sales. Crucially, these are charged on gross sales regardless of whether the unit is profitable, so they come off the top before your own costs.
Why does the franchisor’s cut change how I think about margin?
Because it is charged on gross sales, not profit, it reduces the margin available for everything else before you spend a dollar on rent, wages, or stock. A site with thin operating margins can be pushed near breakeven by a ten per cent combined fee. You have to build unit economics with the fees where they actually fall, off the top, to see the true contribution.
What is unit contribution after fees?
It is what a site earns for you after subtracting the costs it controls and the royalty and marketing levy charged on its sales. It is the real measure of whether a site is worth running, and it is often very different from the site’s headline profit, because the franchisor’s cut comes out before you see anything.
How do I know which of my units are actually carrying the group?
Build each site’s P&L to contribution after fees, then roll them up less your head office cost. This exposes the common pattern where one or two strong sites subsidise weak ones while the blended group result looks acceptable. Once the subsidy is visible, each weak site becomes a specific decision rather than a number hidden in the average.
Can a virtual CFO help me decide whether to open another unit?
Yes, and it is one of the most valuable things they do for a franchisee. Rather than relying on the franchisor’s optimistic projection, a virtual CFO builds a next-site model from the real contribution profile of your existing sites after fees, so you can see what the new site must achieve to justify the capital and how long the ramp should take.
Do you deal with the franchisor on my behalf?
No. A virtual CFO builds your financial picture and the models behind your decisions; negotiating with the franchisor, and any legal questions about the franchise agreement, are for you and your lawyer. The CFO work gives you the numbers to negotiate from, which is often what franchisees lack most.
How much does it cost?
The 90-Day Number is a fixed $17,850 plus GST for one named deliverable by day 90, no retainer. The common Australian alternative is an open-ended monthly retainer at $3,000 to $8,000; the fixed-scope project model is deliberately different and rare in this market.
Sydney Virtual CFO is a Sydney-based virtual CFO service for founders running $2M to $15M businesses across SaaS, ecommerce, professional services, construction, and other low-volume, high-value industries. We deliver fixed-scope CFO engagements with a named deliverable on day 90: a 13-week cashflow forecast, a fundraise-ready financial model, a unit economics build, or a board reporting pack you can run on your own.
Our front-door product, the 90-Day Number, is fixed scope at $17,850 plus GST. We are one of the few project-based virtual CFOs in Australia, in a market built almost entirely on monthly retainers. No retainers without a deliverable. No 80-page reports. No theatre.
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This content is general information only, written for Australian founders running businesses in the $2M to $15M revenue range. It does not constitute tax, financial product, investment, or legal advice and should not be relied on as such. The work referenced is led by a Chartered Accountant (CA ANZ), but Sydney Virtual CFO is not a licensed tax agent, not a licensed financial adviser, and not authorised to provide personal financial advice. Tax obligations, accounting treatments, fundraise terms, and statutory requirements depend on your individual circumstances. For advice specific to your business, contact the team directly or consult a registered tax agent, licensed financial adviser, or qualified lawyer. Information was current at the time of publication and may change without notice. We review and update guides periodically.
