Best Credit Card Processing Options for Franchises

Find the best credit card processing option for your franchise that will save you time and save you money, every day. Read the full article to know more.

Franchises are in a unique situation as they shop for the best credit card processing options.

In this article, we break down the necessary steps for both franchisors and franchisees. You can also check out our YouTube video above for more information. Or, schedule a free consultation with a payments expert!

Credit Card Processing: Best Practices for Franchisors

With multiple locations and a high sales volume of credit card transactions under their control, franchises are very attractive businesses to card processing companies. Franchisors should take advantage of that fact to establish a credit card processing franchise solution that best suits their needs.

If franchisors understand the appeal of their business model, they will have the leverage to negotiate more favorable payment deals.

Regardless of the size of your franchise business, we highly recommend hiring a CPO. Alternatively, you can find a fractional Chief Payments Officer or consultant to guide you through this process. In the meantime, we'll give you a brief overview.

Before you begin researching how to tackle your payments system, you must decide if you want to earn revenue from credit card processing or offer franchisees the cheapest option to accept payments.

This choice should frame every decision regarding your franchise payment network: payment software, hardware, payment processing fees, rates, and more.


To make the first steps in improving your payment options, you'll need to know what software you use to run your business. You must also determine whether the payments are attached. The best credit card payment system for your business will be influenced by your current tech as well as your operational needs.

Let's break this down into three categories:

If you own your point of sale, business management, or payment software.

Not only is this the most affordable option, but it's also a potentially lucrative way to process payments.

In this position, franchisors have two options. With either option, you can set up a revenue-sharing relationship with a payment provider. SwipeSum often advises franchises through those negotiations.

The first is a direct integration with a provider or gateway. As opposed to a direct integration with one provider, a gateway would allow you to work with multiple providers, and your franchisees can operate with their own merchant accounts.

The second option is the most popular solution, and the one we tend to suggest: payment facilitation. Payment facilitation gives your software a more Square-like experience to streamline payment processing for your franchisees.

It essentially turns your software into a home base for all payments, reporting to both the franchisor and franchisee. In this model, the franchisee uses flat-rate fees, and merchants are instantly on-boarded to make an easy-to-understand franchise merchant services system for everyone. In many cases, this is the best credit processing service option for managing franchise business payments.

If you license software from a vendor.

Whether you use a point-of-sale system for restaurants or a service management system for fleet units, you will need to contact your specific provider to find out who they work with. Be sure to ask about their payment integrations and supporting gateways to get a more holistic picture of every pricing option.

Operating without payment software.

This means your franchisees need either a virtual terminal or physical card terminal. You can contact almost any provider to receive these terminals.

In some ways, starting with a clean slate makes it easier to find the right provider for terminals, and the best credit card payment processing solution overall. Should you decide it’s in the company’s best interests, you can choose to purchase software or license it from a wide range of providers.

A customer uses the tap-to-pay function of a physical credit card terminal at a supermarket.


There are thousands of payment hardware options, including a wide range of point-of-sale systems and credit card machines. As a franchisor, you get to decide which is the best credit card system for your unique offering. We recommend contacting your provider or fractional Chief Payments Officer to see what is available to your franchise.


Finding the best payment rate solution ties into selecting the best provider for your franchise. In the U.S. alone, there are over 5,000 credit card processing providers.

Typically, many of these are resellers of a bigger company’s offerings. We strongly suggest bypassing the resellers and working directly with the largest providers.

Next, you'll get into contract negotiation. A very important part of this conversation will involve rates. You should only agree to one of two pricing structures: cost-plus or flat rate.

  • Cost-plus pricing adds a fixed markup fee to interchange rates. This is the most transparent pricing model in payments with the potential for discounts on the interchange fees. 
  • Flat rate pricing is exactly what it sounds like; it offers a fixed rate for each transaction. This is the best credit card merchant services option for your franchise if the average ticket size is relatively low.

Let's pull all of these concepts together with an example. If you own a franchise of coffee shops with your own payment software, you should select the payment facilitation method with flat-rate pricing.

Because most of your customers purchase small food and drink items, it would be in your best interest to keep a fixed and predictable processing expense each month. As the franchisor, this will ultimately help you budget effectively.

Payment Facilitation?


Now, let's take a look at the process from the perspective of the franchisees.

If you are a franchisee, your first step in this payments journey will be contacting your franchise to see if they have a preferred processing relationship or specific payments companies that they have already pre-vetted for you.

In our experience, more often than not there is no pre-established relationship — no best credit card service provider has been identified. Franchisees are on their own to choose a credit card processing company and negotiate their terms and rates.

If there are preferred payment vendors that work specifically with your company, get pricing and contracts from everyone. You have the leverage at this point, and you'll need this information to have the vendors compete on pricing.

These payment vendors also do not know of the other partnerships your franchise has established. You can use this to your advantage by obtaining outside pricing from vendors to strengthen your negotiating power when it comes to signing your contract.

If you find out that there are no preferred vendors from your franchise and are told to make the best payments decision, we strongly recommend finding a payments consultant or fractional Chief Payment Officer.

As a franchisee, you don’t want to spend the time to redline the contract agreements or figure out the best pricing strategy alone. This process involves contacting as many providers as possible who have the best combination of hardware and software for your unique franchise.

Following this, you would negotiate pricing with the involved players, which could take up to several months to settle on an agreement.

At SwipeSum we are your fractional Chief Payments Officer. We’ve helped multiple franchises, through this same process of finding the best possible credit card processing software.

 Request your free consultation today!

Sydney Stribrny

Sydney Stribrny

Sydney is a rising senior at Washington University in St. Louis studying Media and Marketing. As Swipesum's Creative Director, Sydney creates, designs, and develops strategies for Swipesum's content. In her free time, she enjoys running, watching movies, and cooking.

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We will schedule a quick consultation call to go over how you're currently handling merchant services, and present a proposal at no cost.

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