Franchise systems are traditionally analyzed in terms of outlet expansion, contractual governance, and brand replication, yet their economic sustainability also depends on the ability to structure revenue sources beyond the direct sale of products or services. This article examines the main mechanisms through which franchise systems diversify their revenue architecture, with emphasis on initial fees, ongoing royalties, advertising contributions, margins on input sales, digital integration, omnichannel strategies, and multibrand and multisystem arrangements. Based on a qualitative review of the literature, the article argues that revenue diversification is not merely an accounting outcome, but a strategic choice associated with system governance, incentive alignment, digital transformation, and sector-specific conditions. The literature suggests that more diversified structures may enhance franchisor financial resilience and reduce dependence on a single transactional stream, but they may also intensify channel conflict and distributive tensions when coordination mechanisms are weak. The central argument is that diversification in franchising creates value consistently only when the monetization logic is aligned with operational support, the legitimacy of system charges, and the system’s capacity to manage interdependent relationships between franchisor and franchisees.
Tuilla Magalhaes de Barros Reboucas (Sun,) studied this question.