One of the most distinctive features of medieval narratives identified thus far is their tendency to weave into their narrative fabric stories that are briefly referred to or implied but remain undeveloped. Recent research in narrative poetics can, however, help bring to light other, previously unrecognized features of medieval and other premodern texts. Possible world theory and the concept of virtual narratives, in particular, can show that medieval narratives are also structured by events (e.g., plans, dreams) that, though thoroughly described, are never realized: they remain, instead, virtual to the end. This essay studies Geoffrey Chaucer’s Franklin’s Tale because, among medieval narratives, it flaunts the richest domain of the virtual. Its plot largely revolves around not what happens in its story world but what could happen in it and yet does not. Paying attention to virtual strings of events in this tale helps us evaluate the characters’ behavior and draw critical conclusions about Chaucer’s aesthetic purposes. It also enables us to trace the development of the genre of lai, to which this tale belongs. A comparative study of the earlier lais of Marie de France and Sir Orfeo suggests that The Franklin’s Tale marks a moment in the history of genre development when medieval lais, due to Chaucer’s interest in unrealized possibilities, begin to resemble modern psychological narratives more than medieval romances.