Here are the benefits of the franchise system as I see it:
1: Infrastructure: A local journalist is not going to have time/skillset to manage their own CMS, hosting, and ad tech. In this case, TAPinto is handling all that for you so you can focus on creating great content.
2. Network effect: Buy being part of a larger network, there are opportunities for cross pollination from ad sales across several TAPinto sites. The TAPinto owners I interviewed benefited from having other TAPinto chapters selling ads on their sites.