P&L Deep Dive: Profit Doesn't Collapse, It Leaks

MUFC 2026, Day 2: Breakout Session

Multi-unit franchisees looking to improve profitability need to stop treating their P&L as a report card and start reading it like a story.

That was the central message from “P&L Deep Dive,” an MUFC panel led by Kris Cox, CFO of Sizzling Platter, alongside operators Monica Harrigill (Massage Envy, Palm Beach Tan, My Salon Suite, Hampton Inn & Suites, and Holiday Inn & Suites), Nick Marco (Hand & Stone Massage and Facial Spa, Sweat440, and Drybar), and Greg Thomas (Great Clips, Smoothie King, and Salty Dawg Pet Salon).

“We want to get into the depth of why things are happening inside our P&L, learning how to read the P&L like a story, understand it, and deep dive it,” Cox said.

The panelists advised operators to learn how each budget line item affects their business. The shift in mindset separates reactive operators from disciplined ones. Top performers don’t just review results; they investigate them.

“You’ll be amazed at what you find,” Thomas said.

Marco said building a “culture of profitability” starts with visibility and ownership. He ties general manager incentives directly to profit and reviews P&Ls regularly to identify variances and assign action items.

“The number one thing was just awareness,” Marco said, noting that increased focus on profitability drove more than $1 million in additional profit across his portfolio in one year.

Transparency is key. Harrigill said her team shares P&Ls with managers and expects them to take ownership.

“Everything above the EBITDA line, they own,” she said.

Panelists stressed that the biggest threats to margin are often small decisions. Discounts, insurance costs, vendor creep, and minor operational expenses can quietly compound over time.

“I think sometimes we fight the elephants, and we forget about the mice,” Harrigill said.

Thomas said those small shifts are where most operators lose control. “Every one of those percentage points matters. They add up,” he said.

He added that many franchisees underestimate what good profitability should look like, noting that operators need to understand their margin targets and how quickly they can disappear if not actively managed.

Discounting, in particular, was highlighted as a hidden risk. Promotions designed to drive growth can unintentionally erode margins if they don’t attract new customers or improve long-term value. Thomas pointed to poorly designed promotions as an example of bad revenue, where sales increase but profitability declines. In some cases, brands give away value to existing customers without attracting new business.

As businesses grow, complexity increases. More units mean more systems, more overhead, and more opportunities for inefficiency. Panelists stressed the importance of focusing on the highest-impact areas first.

Technology also plays a growing role in managing that complexity. Marco advised operators to appoint a dedicated tech expert to oversee systems, improve reporting speed, and eliminate manual inefficiencies.

“There are so many tools that will help you be proactive,” he said.

Discipline is what ultimately drives results. The operators described consistent monthly reviews, structured reporting, and accountability systems as essential habits. Harrigill emphasized asking “why” repeatedly to uncover root causes, and Marco said task management tools help ensure follow-through.

In the end, profitability is not lost in one dramatic moment. It slips away quietly through small decisions, missed signals, and a lack of discipline.