There is a version of "aligned incentives" that is just a slogan. A company says it only wins when its clients win and leaves it there.
Ours is supposed to be a mechanism. So it is worth being specific about what it does and, more usefully, what it does not.
The fee is revenue, not profit
Our fee is a percentage of gross revenue.
That is deliberate, and it is a different claim from "we only earn when operators succeed," which sounds similar and is not accurate. We earn whether a given month was strong or slow. What the structure buys is real exposure on our side: the lease, the property taxes and the interest-free financing are our obligations regardless of how anybody's month went. A slow month is a smaller fee for us, not a renegotiation with you.
That is the alignment people expect to hear about.
The part that matters when competition arrives
Revenue indexing is not really about one slow month. It matters far more as a market matures.
More licences, more competitors, eventually price compression. That is a normal stage in any retail category rather than a sign something has gone wrong. What decides who survives it is not whether prices compress, because they will. It is whether your obligations compress with them.
A fixed obligation does not. Debt service on a conventional loan is the same number whether the market is generous or brutal, so it takes a growing share of a shrinking margin at exactly the moment you can least afford it.
A revenue-indexed fee moves the other way, automatically, with nobody having to renegotiate anything.
That is not protection from competition. Nothing is. It is protection from carrying a fixed-cost structure into a market it was never priced for.
The part that is easy to miss
Here is the less obvious piece.
As the number of stores grows, the rates behind them improve. Insurance, banking relationships, vendor contracts, buildout materials. That is true of essentially every negotiation we run on behalf of the portfolio, because the volume standing behind it keeps getting larger.
And those improved rates do not go only to the newest store.
They apply across the board, to everybody already on the platform, including whoever signed when the portfolio was a third of its current size. An operator who joined early is not watching new entrants get a better deal than they got. Their own insurance and vendor position gets stronger every time somebody else joins.
Why that is less common than it sounds
It would be easy to build a platform where growth benefits only the platform and existing operators are along for the ride.
That is not a hypothetical. Plenty of scaled service businesses work precisely that way, with volume discounts accruing to the parent company's margin rather than to the people who created the volume.
We chose the other structure, and the practical consequence is that we have no reason to slow growth in order to protect our own margin. Growth is part of what keeps the fee defensible.
What alignment should actually mean
Put together: a fee that flexes with revenue instead of guaranteeing us a fixed return regardless of how a store does, and a network effect that gives every existing operator a direct stake in the platform growing rather than a front-row seat while it happens around them.
That is a narrower claim than "we only win when you win." It is also a truer one.