Franchise company approaches to benchmarking varies. At the lesser end of the spectrum, franchisors may benchmark a little; for example, only high-level sales results. At the greater end, by contrast, franchisors may benchmark a lot; such as, sales and sales composition, labour, gross profit and expenses, and a wide range of productivity and/or non-financial (e.g., customer satisfaction) metrics.
Availability and communication of benchmarked metrics, in our experience, will also vary from real-time (i.e., right in the moment), through to hourly, daily, weekly, monthly, quarterly, biannually, yearly, or, frankly, ad hoc.
Companies also vary on how this information is shared, ranging from only the franchisor viewing everything, to franchisees also viewing all results and for all units / stores.
Onto the point here, which is the presentation and discussion of benchmarking results. This is often an area of great opportunity for franchisors and franchisees to learn together, identify insights, and take positive actions for their businesses.
Worst case, benchmarking information is just provided to franchisees – or, put differently, they just have ‘access’ to the information.
Clearly, to bring this information to life requires presentation, discussion and facilitation – often by a well-trained field manager. The field manager can bring their experience and expertise which has been developed overtime, and no doubt benefitted from several field manager capability developing workshops – available in many countries.
Working with the franchisee, a well-trained field manager can put metric areas into perspective, understand how strengths and weaknesses are identified, understand likely priorities and actions, and is well placed and trained to help take the franchisee on a performance and relationship-improving journey. That journey then includes reviewing benchmarking information together, generating insights, identifying objectives and actions and updating their business plan.
That field manager can then help facilitate the franchisee in making the link to implementation; in other words, the franchisee is clear on a range of impactful actions they can take in their business and understand how those flow back into their business plan objectives which they are then motivated to do.
Most importantly, the franchisor plays a role in helping bring this benchmarking information to life and helping to interpret what it means and how it can be used in decision-making. Franchisors can also organise franchisee performance group workshops to provide a similar (often complementary) role.
Relevant questions:
- How do you share benchmarking results with franchisees? Are there improvements you could make in order to maximise the opportunities this information could provide for both individual franchisees and the franchisor?
About the Franchising Best Practice 500 Series
This is part of a series of franchising best practices. Franchize Consultants is sharing and publishing these best practices weekly for the betterment of franchising. We know that better knowledge and execution of franchising best practices leads to bigger and more valuable franchisor and franchisee businesses.
We have assembled the first 40 best practices into The Best Practice Handbook, which is available for purchase.
