5 Steps to Using Benchmarks in the Franchise Business Plan

By | Benchmarking, Franchise Business Plans

You understand the benefits of planning and you have discussed the franchisee’s goals and expectations. But, how do benchmarks fit into the overall picture? Benchmarks allow you to measure performance of one franchisee against the other. With this in mind, here are 5 steps to connect these two key pieces into a valuable whole.

1. Identify the area where the franchisee needs to improve

Finding the area of improvement can be either proactive or reactive. If it is proactive, it is part of the franchisee planning process, and it is a goal to strive for. If it is reactive it is perhaps in response to a violation on an audit. Areas for improvement can also come from program rollouts from head office, from a new service line to an annual Marketing contest in the busy season.

2. Measure the franchisee’s performance in that area

Measuring performance in the area gives you a “before” and “after” picture. Financial performance metrics are easy to quantify, and the more “direct from source” they are, the better. Customer Satisfaction can also be looked at through Net Promoter Score (NPS), Google Reviews or a tool like Review Trackers. Finally, the Franchise Audit provides a score-based method for you to put numbers to actions. If you are measuring “self-report”, it is a bit fuzzier, because human nature means that some franchisees may over- or under- report. Having “hard back-up” can help – such as requiring receipts for investments in marketing submitted to get rebate.

3. Decide which franchisee you would like to benchmark against

While every franchisee will have a reason why their market is unique, there are always ways to compare them to other businesses, whether they are in the same region or training group, for example. If they have similar business types, such as a business with a drive-through, in a mall or off-premise – you can also look at that as a benchmark peer. Compare your franchisee to a like group, to be both fair and results-driven.

4. Compare data collected to franchisee performance

Now it is time to look at what is happening for the franchise compared to others. If they are below average, you will want to boost their score. If they are average, and they want to be more of a leader, you can shoot for that – in fact Ben and Jerry’s does just that with great success. Sometimes the franchisee will want to win an award in their area of choice. Awards give franchisees audacious goals to strive for, inspiring others to follow in their wake. If you are running a scorecard program, this information is readily available. If not, you may have some work to do in terms of data gathering.

5. Create a project or action plan

Any good sales manager will tell you that revenue goals alone do not help sales teams succeed, activity goals do. So – instead of thinking of that 5 Million Dollar target, a salesperson can think about one appointment with a qualified decision maker per week, for example. Action plans are the building blocks to goals. Having an Project Management or Action Plan tool is a fantastic way to track this.

Final Word

Once you have your benchmarks integrated with your plans, the franchisee can get back to focusing on the day-to-day in a more effective way. After this, you can do regular calls or check-ins with franchisees on a monthly or quarterly basis. As a leader in benchmarking tools for franchisees, FranchiseBlast is a great way to accelerate your planning cycles.

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