Sorry about this but with me deciding to do a do-over with Spidey and me struggling to put my ideas onto paper for this story; I will share with you what I had planned.
Frank and Microchip would have come to this city where at work is the Watchdogs who are targeting people of colour and recruiting white supremacists and neo-Nazis. They would be working and funded by respected psychiatrist and author Johann Fennhoff who sees his alliance with the Watchdogs as an opportunity to test his unethical side projects. Basically creating a machine that messes with people's minds and he uses it on people of colour to become criminals and have the Watchdogs target those brainwashed forced criminals to try and make them out to be the good guys. Frank doesn't care of his rationalisation and sees him as no better than the Watchdogs.
So yeah Dr Faustus would be the main villain once this big plot starts for the rest of the story and he and the Watchdogs wouldn't be the only Cap villains reworked to face the Punisher. His bodyguard would be Crossbones and it would turn out that the man in the suit Brock Rumlow would have been one of Frank's old squad members from his time in the service and you can imagine how he would feel about that.
Frank would get an ally in Foolkiller in being a reworked version of the Marvel MAX version of the character Mike Trace. Here he would be a dishonorably discharged soldier who was recruited into the Watchdogs when he was emotionally vulnerable but would go against them and be targeting the group under the name of the Foolkiller, when Frank and Microchip finds him; Frank would see him as a potential brother in arms.
Plus Marv Brown the head agent of the task force in his story? Well he would turn out to be Canon Character All Along as being unable to capture Frank in their encounters makes him obsessed and Fennhoff would end up using his machine onto him. He would turn into an out of control killer and don a suit and become known as Bullseye. Yes his name Marv Brown had came from Marv Wolfman and Bob Brown who created Bullseye.
Plus Fennhoff's big plan to deal with Frank was to screw him mentally and use the machine on him and then bring in one of the recruited Watchdogs: to Frank's shock and horror it would have been his son who was said to have survived but went into witness protection. He would have laid into Frank and called him a bad dad and husband and just using what happened as an excuse. Basically reworking what Mrs Castle said in the latest Frank run that he starred in.
Frank would be shaken and tried to think of a way to bring down the Watchdogs while trying to get his son to come to reason. However Kraven the Hunter would come in (after having last seen being recruited in All-New Spider-Man which was seen) on behalf of a secret government agency to try and capture and forcibly recruit Frank. Kraven would be disappointed in how soft he sees Frank is and he would pull the rug out and reveal to Frank that 'Junior' is actually Kraven's half brother the Chameleon (who was mentioned in the FBI office). To say that Frank would be pissed would be an understatement.
With renewed dedication; he fights the Watchdogs and ends up using Fennhoff's own machine on him driving him mad; he sends the Watchdogs into a frenzy and have them attack in a hall and orders the Watchdogs to shoot Frank and his allies dead. However Fennhoff gets through his delusion and finds out that instead he and his minions attacked a televised gala with important figures and officials in attendance with guests murdered by his orders on live TV. His reputation ruined and he ends up committed as he loses his sanity with his Watchdogs alies being vilified along with the officials secretly leading the group who were his allies. A fitting end to a monster who used people as his guinea pigs for his mind game experiments and was willing to stoke hate for his research.
However Foolkiller would end up being the final boss for Frank; going from a vigilante and starting to decide that he must kill all 'fools' and defines them as anyone living a lie or fooling themselves. Frank would have to put him down and laments that he lost the one person who might understand what it would have been to be him. So he and Microchip would end the story travelling in the Battle Plan to deliver Frank's brand of justice wherever they find it. They woudl later appear again in the Spidey story for the next crossover.