Scope 3.14 - Franchise

Why Scope 3.14 "Franchises" Matters

The climate impact of your business often extends beyond your own walls through the unique relationships you build—none more influential than your franchise network.

Under Scope 3.14, you account for greenhouse gas emissions from the activities of businesses that operate under your brand but are owned by others.

This is a powerful lever for promoting sustainability at scale and demonstrates your leadership, integrity, and compassion—showing that you care not just for your own emissions, but for those generated in your wider ecosystem.

By including franchise emissions, you encourage collaboration, engage with your extended business family, and set the tone for impactful climate action. This aligns with your ambition to deliver quality and support ambitious, science-based targets, ensuring no part of your brand is left behind in the transition to low-carbon business.

What’s Included in Scope 3.14?

Scope 3.14 covers emissions from the operation of franchises that carry your brand but are not under your financial or operational control. These franchised locations generate emissions through their energy use and business activities, often mirroring your own operations.

Examples:

Fast food restaurants, cafes, or retail outlets run by independent operators under your brand.
Hotels, gyms, auto service centers, and any other franchises using your trademarks, systems, or support.
Warehouse or logistics operators officially licensed to act as franchisees.

Covered emissions typically include:

Energy use (electricity, gas, fuels) for heating, cooling, lighting, equipment.
Refrigerant leakage, waste and water use, if significant.

Not included:

Company-owned outlets (covered under Scope 1 and 2, or 3.8).
Joint ventures, subsidiaries, and affiliates not under a franchise agreement (see relevant Scope 3 categories).
Activities up or downstream of the franchise operation (e.g., product use—see 3.11, end-of-life—see 3.12).

What Data Do You Need?

Collecting consistent, reliable emissions data from franchisees can require patience and compassionate engagement. Here’s the data hierarchy:

1. Franchisee-Specific Data (High Quality)

Direct data from each franchise location: energy consumption, refrigerants, water, and waste.
Data gathered through required franchise sustainability reporting, utility bills, or internal systems.

2. Modeled or Allocated Data (Medium Quality)

Apply typical energy and emissions profiles per store, per square meter, or per unit of turnover for sites where direct data is unavailable.
Use averages from a sample of reporting franchises to model total emissions.

3. Standardized Industry Data (Minimum Quality)

Use published industry averages or benchmarks for typical franchise operations like yours.
Adjust per location based on known variables, such as size, hours of operation, or climate region.

Tip: Whatever your starting point, make your estimation process transparent, and plan for yearly improvements through better franchisee engagement.

What Should You Watch Out For?

Boundary clarity: Only include activities under formal franchise agreements and not under your direct operational or financial control.
Data consistency: Franchisees may apply a wide variety of practices; strive for standardized data collection formats and provide training/support where possible.
Allocation: Clearly allocate emissions to the correct reporting period and franchisee, especially if ownership changes mid-year.
Double counting: Ensure emissions from company-owned locations are excluded from franchise reporting.
Engagement: Approach franchisees with empathy—many may be unfamiliar with emissions tracking and reporting, and may lack resources or know-how.
Continuous improvement: Develop a roadmap to onboard more franchisees to reporting over time, and celebrate every milestone collectively.

Example of Data Needed

Franchise Type	Data Points	Preferred Source	Typical Allocation
Fast food outlet	Annual electricity/gas use	Franchisee utility bills	Per franchise location
Gym	kWh use, refrigerants, waste	Franchisee reporting	Area, operating hours
Hotel	Energy use, water, waste	Franchisee or chain data	Room nights, occupancy
Retail store	Annual utility data	Centralized brand system	Square meters, sales

Our Support for Your Quality Journey

Start simply, keep improving: Use benchmark data first if you must—for example, average kWh/m²/store—and develop plans to phase in direct data collection.
Deliver quality through collaboration: Provide franchisees with guidance, templates, and encouragement. Offer recognition for early adopters and support for those who are just beginning.
Compassion fuels progress: Recognize the varying capacities of your franchise partners. Equip them for success with clear communication, training, and support.
Act sustainably: Champion programs that help franchises save energy, cut emissions, and boost sustainable practices—helping both your brand and franchisees thrive.
Feedback is a gift: Invite your franchisees to share challenges and solutions—what works in their context can inspire innovation across your network.

Summing Up: Checklist for Scope 3.14

Identify all locations operated under your brand via franchise agreements.
Collect or estimate energy/emissions data from as many franchisees as possible.
Use formal allocation models for any gaps, and document all methods carefully.
Report your franchise emissions separately and transparently.
Develop a plan to increase franchise engagement, training, and data quality each year.