There's two options:
Either it's successful by itself, which means it could cut bait from LRG and live on it's own.
Or it's a boat anchor and can only thrive due to the LRG branding, likely costing much more to run than listing all the excess on Amazon to clear inventory.
Remember, they chose the spot in an area specifically underserved by game stores. That area was either underserved because of luck or because it wasn't a meaningful game market (for any store without a pre-existing brand to prop it up).
Knowing how hard it is to keep game stores running, more so ones soley based on video games, it's probably propped up by the branding. If Embracer were to require down sizing, extra rent to store games better sold online in a retail storefront versus in a warehouse seems like an easy cut to me.
I would bet the game store gets to keep on with th current staff but has to remove the LRG branding and just become a standard affiliate store. It might survive on its own, might not; nevertheless, a game publisher selling boutique stuff is better served online than at one physical location.
And given how those shelved seem pretty stacked deep on a weekly basis, a bet their product turnover is low; likely propped up by those guys who charge fees to buy and ship games to collectors. Which, again, is LRG missing out on direct sales.
I still think the store was always a dumb idea, COVID or not, and it hopefully is kept separately on the books and is self supporting, both in terms of funding and without the LRG brand. Otherwise, it's at great risk of closing, IMO
Highly doubt it could be franchised given the fact that LRG specifically put it in a location with minimal competition. While mom and pop stores are coming back, GameStop ain't doing so great and investing in commercial space where the market is predominantly going digital is dumb.
Boutique means online now. Use mom and pop affiliates for excess inventory. Sell stuff at cons. The store is obviously a pet project/marketing move, at best.