A franchisee is a merchant who operates as an independent company funded by equity capital and offers goods or services using a standardized marketing strategy in stores owned by a franchiser.

In the SAP system, a franchisee is modeled as a site in the site master. You must assign this site to a company code. There are two ways of doing this:

• If Financial Accounting is not active for the franchisee, it can be assigned to a company code that is used for all franchisees without Financial Accounting. This company code can be considered a "dummy" company code.

• If Financial Accounting is active for the franchisee, it must be assigned to its own company code. All the stores of a franchisee are assigned to the appropriate company code. In this case, the company code is an additional grouping characteristic.

You can activate Inventory Management for a franchisee, regardless of whether it has its own company code or is assigned to a dummy company code. You must make the relevant Customizing settings for updating quantities and values for each material type.

If Inventory Management is not active for a franchisee, the appropriate settings must be made for this in Customizing (updating quantities/values for each material type). The fact that there may not be a setting for a material type does not mean that quantities and values will automatically not be updated for the material type. If the settings are made for each material type, and updating quantities and values is not specified, the system does not create the required data retention levels in the article master. This avoids unnecessary data.

If a franchisee has been assigned to a dummy company code, and Financial Accounting is subsequently activated, the franchisee can be assigned to its own company code in the site master. You can also transfer franchisee data to the new company code. Special tools are available for this purpose.

You must carefully consider all aspects before you model the organization. To keep the amount of data to be maintained to a minimum, you can model a company with its own sites and franchisees as follows:

• Assign all your sites in one country to a single company code.
• Assign each franchisee to a separate company code.
• Assign all your sites and franchisees in a country to the same sales organization.