Scope 3 category 14: franchises

Category 14 "includes emissions from the operation of franchises not included in scope 1 or scope 2". It is reported by the franchisor, the company that grants the licence to operate under its brand. It is part of the 15 Scope 3 categories.

Who reports what

• Franchisors "should account for emissions that occur from the operation of franchises", meaning the franchisees' own Scope 1 and 2 emissions, in category 14.
• Franchisees report the emissions from operations under their control in their own inventory. They may optionally report upstream emissions related to the franchisor's operations in category 1.

Methods

• Franchise-specific: collect each franchise's energy, fuel and refrigerant data (or its calculated Scope 1 and 2), then add them up.
• Average-data: estimate from averages, for example energy per outlet or per square metre for each franchise format, when data from individual franchises is not available.

Making it work in practice

Restaurants, hotels and retail networks often have hundreds of franchised sites. A workable approach:

1. Ask a sample of franchisees for a year of electricity, gas and refrigerant top-up data.
2. Calculate emissions per outlet for each format and country.
3. Apply those averages to the outlets that did not report, and state the share covered by actual data.

Refrigerant leaks can be significant where franchises run refrigeration or air conditioning; see the Scope 1 guide for why a few kilograms matter.