My current business model (still in the works) includes a set of 4X6 prints and I scan all the photos as high res as I can on my Epson - good enough for 11x14 prints for 35mm and probably 20x24 for medium format. (I should note that I currently shoot digital + film side by side at the moment).
I make the suggestion that I would prefer to do the printing for them (or atleast give them suggestions to get better quality than photocopying. LOL), but I ultimately leave it up to the client to do what they want. I know that this means that quality may suffer if they send to un-color corrected, different RGB, only 4-bit, 72 dpi printing place but I figure that my high quality 4x6 prints can be a reference for a good print. If they want a print enlargements, I offer to do it for them and just charge a fee.
I more or less follow a model of frontloading the service fee to cover my general costs and leave the client to decide on enlargements. The purpose of the 4x6 prints is to show them what the photo *should* look like, but more importantly to give them a set of prints - my gift to them. As they say on Inside Analog Photo - You don't have a photo unless you have a print!
To be honest, this model of business is still a work in progress for me. Will see how it goes in the upcoming months!