Why aren’t banks run as franchised businesses?

Great question. Banks don't franchise primarily because of three reasons:

• Financial Regulator: The central banks (and/or the Financial Regulator) currently do not give permission to banks to franchise out their retail operations of a branch completely. The US, UK, Canada I know for sure do not allow it. Banks are however allowed to have points-of-presence where deposits can be made (but non-teller based).
• Money Control - Risk: From a risk perspective, a franchisee is high-risk as far as a bank is concerned. There would be enormous amount of trust and work to be done for a retail branch to be adeuately within the operation band as far as risk and compliance is concerned.
  
• Domain Knowledge and Service Quality Issues: Running a retail bank network requires a large amount of domain knowledge for which bankers are trained for. Franchising this out, would mean that the bank would have to keep a continual look out to ensure that a franchisee's HR is up to mark on this, especially with all the laws and regulatory issues. Service levels are another concern. The banks excel in having uniformity of service levels all across. Since this is a tad bit more difficult than frying chicken and the average IQ requirement is higher, it does pose a bit of a problem for the banks.
  

From an ROI point of view, franchising would make great sense, but only those that are planning to expand branches. Banks can save a decent amount of money for expanding their network via the franchising model however with so much money available to the banks as it is, it is much more convenient for them to invest in this, themselves.