What is Scope 3 Category 14: Franchises?

Summary

In GHG Protocol terms, Category 14 includes emissions from franchisees’ operations that occur within the Scope 1 and Scope 2 boundaries of the franchisees, where the franchisor does not have financial control (or operational control, depending on the consolidation approach) over those sites. In other words, these are emissions from running franchise locations that you do not own, but that operate under your brand.

Franchise emissions are reported separately from your own Scope 1 and 2, and separately from other Scope 3 categories. For example, if your organisation owns and operates some locations directly, emissions from those sites sit in your Scope 1 and 2. Category 14 is specifically for locations that are franchised and therefore sit outside your organisational boundary.

Examples of Scope 3 Category 14: Franchises emissions

What counts depends on your franchise model, but common examples include:

• Fuel used in franchisee-operated vehicles (e.g. delivery vans, service vehicles)
• Energy used in franchised sites (electricity, gas, heating and cooling in stores, restaurants, gyms, clinics, hotels, etc.)
• Refrigerants and leakage from cooling equipment operated by franchisees (e.g. fridges, freezers, air conditioning)
• On-site processes at franchisee locations (where relevant to the sector)

In practice, Category 14 is often dominated by energy use in franchise buildings and refrigerants, especially in sectors like food service, retail, hospitality, and leisure.

How to calculate Scope 3 Category 14: Franchises emissions

The GHG Protocol approach is typically to collect activity data from franchisees and calculate emissions using standard factors, or use credible estimates where primary data is not yet available. Common approaches include:

• Franchisee-specific (preferred): collect actual electricity, gas, fuel, and refrigerant data from franchisees, then calculate emissions using appropriate emission factors
• Average-data (activity-based): estimate emissions using metrics like floor area, number of sites, opening hours, or typical energy use for a site type, multiplied by relevant emission factors
• Spend-based (less common here): use spend proxies where activity data is unavailable, though this is often less accurate for operational emissions than energy-based data

Key inputs usually include a list of franchise locations, basic site attributes (location, size, type), and franchisee utility and fuel data where available.

How to reduce Scope 3 Category 14: Franchises emissions

Because franchise sites are operated by others, reductions typically come from enabling and influencing franchisees, for example:

• Set clear standards and guidance: provide practical, brand-aligned energy and refrigerant management standards that franchisees can implement
• Make it easy to act: offer toolkits, preferred suppliers, and step-by-step upgrades (LED lighting, efficient HVAC, refrigeration maintenance, smart controls)
• Improve data quality over time: start with simple data requests and build towards consistent, comparable reporting across the network
• Incentivise progress: recognise high performers, link support or benefits to disclosure and action, and build climate requirements into franchise agreements where appropriate
• Focus on the biggest levers: prioritise energy efficiency and refrigerant management first, since these often drive the largest operational emissions in franchised locations