If you are running a franchise location, your chart of accounts is more than a bookkeeping tool. It is the structure that keeps every store speaking the same financial language. When categories are clear, consistent and easy for your team to use, you get reports that reveal real insights. When they are messy or inconsistent, even strong operators end up making decisions with incomplete information.
A standardized chart of accounts helps you compare performance across locations, understand true unit profitability and keep your reporting aligned with your franchise agreement. It also strengthens your conversations with lenders, investors and brand leadership.
Here is a chart of accounts template for franchisees that works across your entire network and why it matters for your bottom line.
Build Categories That Match How Your Franchise Operates
Many franchisees start with a generic template and add accounts as issues come up. Over time, this creates a chart of accounts that grows unevenly. Instead, step back and design categories around your actual operations.
Revenue categories should match the way your customers buy from you. If you run hardware stores, that might mean separating building materials, tools and service revenue. If you operate wellness studios, you may want to distinguish class packages, memberships and retail product sales.
Your expense categories should support the metrics you want to manage. For example, breaking out retail inventory separately from consumable supplies helps you track margins more accurately. Separating instructor payroll from general staff payroll gives you a clearer view of labor efficiency.
The right categories make it easier to track trends, flag issues early and measure what truly drives performance.
Keep the Same Structure Across All Locations
Consistency is where multi-location operations win or lose. Two stores can have identical performance but look completely different on paper if they categorize the same expense in different ways.
Make sure every unit follows the same chart of accounts, uses the same naming conventions and applies the same rules. This reduces data drift and gives you clean comparisons when you look at margins, inventory turns or labor as a percentage of revenue.
If you have stores in multiple states, centralizing your chart of accounts makes compliance easier as well. You can standardize how you code franchise fees, brand fund contributions and state specific obligations without reinventing the wheel at each location.
Separate Operating Costs From Brand Obligations
Franchisees have unique fees that independent businesses do not. Your chart of accounts should clearly separate operating costs from items tied to your franchise agreement.
This usually includes:
- Royalty fees
- Brand or national marketing fund contributions
- Technology or POS fees required by the franchisor
- Development, renewal or transfer fees
Keeping these categories separate helps you understand your true operating costs and measure the value you receive from brand level programs. It also simplifies conversations with the franchisor when you want to review support, technology or marketing performance.
Typical Franchise Chart of Accounts Categories
Below is a practical, commonly used structure that works well for most franchise systems. You can adjust the detail level depending on the size of your network, your POS setup and your reporting needs.
Revenue
- Product sales
- Service revenue
- Memberships or subscriptions
- Online or ecommerce sales
- Gift card sales
- Franchise required revenue streams (if applicable)
Cost of Goods Sold
- Inventory purchases
- Freight and shipping
- Vendor rebates and credits
- Direct materials or consumables
- Packaging or retail supplies
Payroll and Labor
- Salaries and wages
- Payroll taxes
- Benefits
- Owner wages (if applicable)
- Direct labor such as instructors or technicians
- Indirect labor such as front desk or floor staff
Operating Expenses
- Rent and common area maintenance
- Utilities
- Insurance
- Equipment leases
- Repairs and maintenance
- Supplies
- Office expenses
- Bank and merchant processing fees
- Local advertising
- Travel and training
Franchise Specific Fees
- Royalty fees
- Brand or national marketing fund contributions
- Technology or system fees
- Required software subscriptions
- Renewal or development fees
Marketing and Customer Acquisition
- Digital advertising
- Local sponsorships
- Printing and promotional materials
- Local marketing fund activities
Occupancy and Store Operations
- Janitorial
- Security
- Waste removal
- Uniforms
- Store merchandising
- Signage
Administrative and Professional Services
- Accounting
- Legal
- Consulting
- Licensing and permits
- State or local business fees
Other Income and Other Expenses
- Interest income
- Interest expense
- Gains or losses on asset disposal
Balance Sheet Items
- Cash
- Inventory
- Prepaid expenses
- Fixed assets
- Accumulated depreciation
- Accounts payable
- Loans and credit lines
- Owner equity accounts
This structure gives you enough detail to understand unit performance without overwhelming your staff with unnecessary choices. Your team should always know which category to use and why it matters.
Use Subaccounts to Highlight Margin Drivers
Some categories are too broad to be useful on their own. This is especially true for inventory, payroll and marketing.
Add subaccounts for the items you want to analyze throughout the year. A hardware store might separate plumbing parts from electrical components, while a wellness studio might track instructor payroll separately from front desk payroll. A few strategic subaccounts can reveal where margin erosion is happening and where improvements will have the biggest impact.
More detail is helpful, but keep it manageable. Too many accounts slow down your team and lead to inconsistent coding.
Align Your Accounts With Your POS and Inventory Systems
Your chart of accounts does not stand alone. It has to match the systems that feed into your accounting software.
If your POS pushes sales data into QuickBooks or Xero, make sure the categories sync properly. If your inventory system tracks products in groups or departments, match those structures to your revenue and cost of goods accounts.
This type of alignment reduces manual corrections, improves real-time reporting, and gives you cleaner data for forecasting.
Reassess the Template Each Year
Franchise systems evolve. You may add e-commerce, expand product lines, introduce memberships or bring in new service offerings. Your chart of accounts needs to be adjusted as your operations change.
Take time at year end to review your accounts. Merge duplicates, remove outdated categories and add structure where reporting feels incomplete. A yearly cleanup prevents clutter and keeps your financial reporting useful.
Work With Accountants Who Understand Multi-Location Brands
A chart of accounts is only valuable when it supports your day-to-day decisions. Franchise operations have unique needs that generic templates often fail to capture. You need a structure that reflects your pricing, payroll model, brand fees and operational nuances.
At SAS, we help franchise owners build charts of accounts that make financial reports actionable. When your numbers are clean, consistent and easy to compare, you gain clarity on where each location stands and what it needs to grow.
If your current chart of accounts feels outdated, our team can help you rebuild it into a system you trust.
