By Joe Keeley, Co-Founder & Strategic Advisor at JustiFi

When I was building College Nannies, Sitters & Tutors (CNST) to over 200 locations, I pushed our franchisees to independent vendors like merchant processing resellers (ISOs) to avoid co-employment risk. At the time, it was the best decision I knew how to make. The logic was sound.

The outcome was frustrating for many.

We'd created three separate problems:

1. I was flying blind. Our franchise business consultants showed up to support calls with last quarter's data instead of real-time insights.

2. My franchisees were frustrated. They couldn't benchmark performance, learn from top-performing locations fast enough, or keep up with managing multiple vendors.

3. Our guests got inconsistent experiences. One location accepted all credit cards online, another only took cash and cards from a terminal held together with duct tape.

We optimized for one risk and created friction for everyone else. This isn't unusual—as franchise systems modernize, legacy vendor models fragment data and push complexity to franchisees, adding locations without maintaining visibility.

Today, success doesn't require trade-offs between franchisor intelligence, franchisee independence, and guest experience. Leading networks design technology to align all three by default.

Why the Best Franchise Candidates Are Asking About Your Tech Stack

Today’s top franchise prospects aren’t just evaluating your FDD. They’re evaluating whether your brand gives them a competitive advantage, or a vendor management job.

They expect exceptional digital experiences, fast onboarding, and modern automation. They don't want a list of approved vendors they need to coordinate themselves.

Franchise networks that can provide solutions without operational burden are attracting stronger operators. Those that can't are competing for candidates who increasingly compare brands on more than just unit economics.

The Co-Employment Lens

(and Why It’s Not the Whole Story)

The fear is real: joint employer liability can expose franchisors to wage violations, discrimination claims, and labor disputes, driving conservative decisions like pushing franchisees to independent processors and sacrificing visibility.

But focusing only on what to avoid can obscure what the system needs to run well. Modern networks should ask whether their vendor choices support platform models where visibility, franchisee independence, and customer experience work together.

When Franchise Systems Aren’t Fully Connected

Problem #1: Franchisors Need Visibility Without Control

Franchise networks that lack system-level visibility consistently struggle to provide proactive support.

When franchisees use fragmented vendors and systems, you lose real-time performance trends, early warning signs of struggling locations, and the ability to identify and replicate what top performers are doing. Support teams discover problems reactively—often with data that's 60–90 days old.

The fix isn't more reports, it's solutions that make transaction data usable at the system level without inserting franchisors into daily operations.

Problem #2: Franchisees Want Ease and Innovation, Not Vendor Management

Franchisees didn’t invest to become technology coordinators. But modern operations demand it.

When vendor decisions are fragmented, franchisees negotiate their own rates without network leverage, manage integrations themselves, and operate without benchmarking visibility. When disputes and chargebacks hit, and they will, they're left scrambling with limited tools and inconsistent guidance.

What they need is network-level leverage, competitive rates, shared capabilities, and embedded money movement - without becoming dependent on the franchisor to operate.

Problem #3: Guests Expect Brand Consistency — Even at Checkout

Your brand promise is only as strong as the weakest operational moment.

When payment acceptance and checkout experiences vary wildly by location, customers don’t think “that franchisee had an outdated terminal.” They think “that brand is inconsistent.”

Standards like digital wallet acceptance or financing options should be systemic defaults, not location-by-location decisions.

Inconsistency shows up everywhere: onboarding new members with clunky sign-up flows, processing routine payments with outdated systems, and offboarding with confusing cancellations and refunds. Each friction point erodes trust in the brand as a whole.

What Modern Franchise Networks Actually Do Differently

One national franchise network operating more than 1,300 locations across multiple brands faced the same challenge: how do you gain visibility while adding value, not friction?

This shift isn't about adopting another vendor. It's about recognizing embedded finance as part of franchise operating strategy.

Here's what changes when financial tools are designed at the network level rather than location by location.

For the franchisor:

• Unified data and insights on which locations are trending down and which need help

• Royalty collection happens automatically at the transaction level - no more self-reporting, manual reconciliation or delays in cash flows

• Tools for PCI compliance, card network rules, and dispute management give franchisors the controls they need while helping franchisees resolve issues efficiently

• New financial capabilities for high-ticket items to increase sales, while streamlined cancellation and refund capabilities give franchisors and franchisees peace of mind and a better guest experience

For franchisees:

• Each maintains their own independently underwritten merchant account

• Money movement - revenue splits, vendor payments, royalty deductions - is handled within their workflows

• Disputes and chargebacks come with consistent tooling and guidance instead of scrambling alone against card network timelines

For guests:

• A consistent financial experience across locations

• Modern checkout options and flexible payment choices

• Clearer, more trustworthy experiences when cancellations or refunds are needed

"The franchise networks that win are the ones giving franchisees control and flexibility while building system-wide intelligence and best practices," says Casey Kipfer, Chief Fintech Officer at JustiFi. "Franchisees get their own independent merchant accounts, while franchisors access real-time unified data, automatic royalty collection, and benchmarking - without controlling operations. That balance is what allows brands to scale without sacrificing independence or consistency."

"The franchise networks that win are the ones giving franchisees control and flexibility while building system-wide intelligence and best practices."

That’s three-party alignment: franchisors gain intelligence without controlling day-to-day operations, franchisees gain solutions without vendor fatigue, and guests experience the brand consistently.

Stop Accepting the Trade-Off

Looking back at CNST, pushing franchisees to independent ISOs made sense at the time—but I was solving for the wrong constraint. Modern franchise systems can preserve independence while giving networks the intelligence and automation they need, aligning franchisor, franchisee, and guest without trade-offs.

Look, I'm still the guy who once thought duct-taped terminals were 'character.' If you're quietly nodding along thinking 'yep, we've got some of that chaos too,' let's compare notes like two exhausted parents at a playground. No pitch, just lived stories and maybe a better way forward.

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About JustiFi

JustiFi provides embedded finance solutions designed for franchise systems, delivering the tools, controls, and insights networks need to operate efficiently at scale. Franchisees maintain independence, while brands gain real-time visibility, automated workflows, and system-level financial management — all built to support growth and consistent operations.