The verdict in three sentences
At 48 locations, a vertical SaaS billed USD 95 per location per month costs USD 54,720 a year, and the bill grows automatically with every new opening. Custom software at USD 75,000 to 130,000, with USD 1,600 a month of maintenance, becomes cheaper than the SaaS after roughly 30 months. Beyond cost, the franchisor gains ownership of the code and the data, two assets that weigh in the valuation of the network.
Where vertical SaaS hits its limits
Franchise management SaaS is excellent for getting started: live in a few weeks, with field audit, intranet and document distribution modules ready to use. The trouble starts when the network passes 30 to 40 locations and its rules become more complex. Royalty calculations (often 5 to 7% of net sales, plus 1 to 3% for the advertising fund), tiered rates, mixed POS systems and agreements signed on different terms end up in an Excel file maintained by hand by the finance team.
| Criterion | Vertical SaaS | Custom software |
|---|---|---|
| Time to go live | 3 to 6 weeks | 5 to 6 months |
| Cost at 48 locations | USD 54,720/yr, proportional to the network | USD 19,200/yr maintenance, independent of location count |
| Royalty calculation | Missing or limited configuration | Exact rules from your agreements, tiers included |
| Sales data from POS | 1 or 2 POS systems supported | Connectors built for your POS systems |
| Roadmap | The vendor's priorities | Your priorities, delivered in sprints |
| Data portability | CSV export, sometimes partial | A database you own |
| Value on exit | A subscription, no asset | A software asset and full history |
SaaS remains the right call for a network under 25 locations, still testing its concept, or running uniform agreements. Custom software makes sense when royalty management and sales reporting sit at the core of the business model.
Five-year total cost, with the numbers
The table compares both options for a stable network of 48 locations, with custom software at USD 115,000 and an Excel royalty workaround estimated at 2 days of a financial analyst per month at USD 430 a day, i.e. USD 860 a month.
| Item | Vertical SaaS | Custom software |
|---|---|---|
| Upfront investment | USD 0 | USD 115,000 |
| Annual subscription or maintenance | USD 54,720 | USD 19,200 |
| Excel royalty workaround | USD 10,320/yr | USD 0 |
| Annual recurring cost | USD 65,040 | USD 19,200 |
| Cumulative, end of year 2 | USD 130,080 | USD 153,400 |
| Cumulative, end of year 3 | USD 195,120 | USD 172,600 |
| Cumulative, end of year 5 | USD 325,200 | USD 211,000 |
The curves cross at 30 months. If the network grows to 60 locations, the subscription rises to USD 68,400 a year while custom maintenance stays flat. These figures exclude vendors' annual price increases, often 3 to 7%, which bring the crossover even closer.
What custom franchise software includes
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| Module | Scope | Budget |
|---|---|---|
| Scoping and agreement modelling | Tiers, rates, disclosure documents, amendments | USD 6,500 to 11,000 |
| Franchisor back office | Network, agreements, royalty engine | USD 19,000 to 32,000 |
| Sales feed from POS | 2 to 3 POS connectors | USD 15,000 to 27,000 |
| Franchisee portal | Dashboards, documents, training | USD 13,000 to 21,500 |
| Mobile field audits | Checklists, photos, action plans | USD 8,500 to 15,000 |
| Royalty invoicing and accounting export | Monthly invoices, journal entries | USD 7,500 to 13,000 |
| Testing, migration, rollout to 48 locations | Franchisee training | USD 5,500 to 10,500 |
| Total | USD 75,000 to 130,000 |
A hybrid route is possible: keep the SaaS for the intranet and documents, and build only the royalty engine and POS feed for USD 38,000 to 60,000. It lowers the risk but leaves the subscription untouched. In Ontario, keeping agreement data structured also makes it easier to produce the financial information required in disclosure documents under the Arthur Wishart Act.
Mini case study
Mark, COO of a 48-location franchised bakery-café network headquartered in Mississauga, compares both options over 5 years. The SaaS costs him USD 4,560 a month plus USD 860 of Excel work, USD 5,420 a month in total. The custom build he selects comes to USD 115,000 plus USD 1,600 a month. The monthly gap of USD 3,820 recovers the investment in 115,000 / 3,820 = 30 months, and savings reach USD 114,200 after 5 years, before the 12 openings in the development plan.
FAQ
How long does it take to replace our current SaaS? Plan 5 to 6 months, including 4 weeks of scoping. The SaaS stays live until rollout and is usually cancelled with 1 to 3 months' notice depending on the contract.
Can we recover our SaaS history? Yes in most cases, through CSV exports or the vendor API. Check the exit clause: some vendors charge USD 1,500 to 5,000 for a full export.
Do we really own the code? Yes, the transfer of intellectual property is written into the contract and the code is delivered to your repository. On a sale of the network, the software and 5 years of sales data become an auditable asset.
What if the developer disappears? Documented code, hosting in your name and a standard stack (TypeScript, PostgreSQL) let another team take over in 3 to 6 weeks.
Is custom software worth it under 30 locations? Rarely. At 25 locations the subscription is USD 28,500 a year and the crossover moves past 5 years: SaaS remains the rational choice.
Let's scope your project. Send us your location count, your POS systems and your royalty structure, and we will price the custom build between USD 75,000 and 130,000 with a crossover calculation against your current subscription. Detailed quote within 48 h. WhatsApp +221 77 596 93 33.
Mohamed Bah
Fondateur, Kolonell
Passionate about digital and entrepreneurship in Africa, Mohamed has been helping Sénégalese businesses with their digital transformation since 2020. Founder of Kolonell, he believes every SME deserves a professional and accessible online présence.
