How do you evaluate the performance of your franchisees?

Evaluating the performance of franchisees is crucial for ensuring the success and growth of a franchise network. Here are key steps and metrics to consider when assessing franchisee performance: Compare franchisee sales with benchmarks and historical data, Evaluate net profit margins to ensure they meet or exceed expectations and assess the return on investment for franchisees to ensure they are achieving satisfactory financial returns.

You should evaluate franchise revenue based on peer sets, for example, if ten franchisees started their business in 2023 then the benchmark should be assessed across this group of ten. You can also measure YOY (year over year) growth across the system to understand which franchisees are experiencing the greatest growth and who are the lowest performers. In addition, you should evaluate customer retention, satisfaction, their online reputation and lead to conversion ratios.

Franchisees' performance evaluation must be part of your franchise system and such it must be clear and transparent, so franchisees know and understand what to expect. But, even more importantly, franchisees should understand that the goal of the evaluations is not to look for dust or for any little details that they might do wrong! Quality operations and consistency have an impact on sales and more sales equal more profit! That's all there is to it! And the people on the franchisors's team must keep their eyes focus on that in order to limit useless conflicts with franchisees during evaluations.

Un franquiciado sin metas es un barco a la deriva. No irá a ningún lado porque no sabe a dónde llegar. Y entonces empezará a navegar hacia el corto plazo, sin alineación con la visión y misión de la organización. Las redes de franquicias exitosas no sólo evalúan el rendimiento de los franquiciados para saber cuánto van a cobrar de regalías a fin de mes, sino que impulsan a que estos logren metas realistas y alcanzables que les permitan lograr sus objetivos como propietarios de una o varias unidades de franquicia. Si eres un franquiciador emergente, ten estos 3 consejos para desarrollar mejores metas para tus franquiciados: - Se específico en lo que se busca conseguir. - Establece la forma en cómo debe conseguirse. - Mide y corrige.

Every franchise system must establish the key performance indicators (KPIs) that will be tracked to determine both franchisor and franchisee success. For franchisees, KPIs need to be clearly communicated at the start of the franchisee’s journey in the system. While incredibly important, gross revenue should not be the only KPI tracked and analyzed. Marketing (e.g., leads generated, ROI), sales (e.g., # leads contacted, close rate), and operations (e.g., rate of retention, NPS) are a few other business areas that should have established KPIs that help to determine business health. The regular analysis of performance data should guide the franchisor’s support efforts as well as guide the franchisees’ daily operations.

To evaluate the performance of franchisees, I employ various methods. Firstly, I assess whether they have mastered our brand culture and work system, ensuring they can continue to operate according to our established criteria. Consistency across branches is crucial, as customers expect the same quality of service regardless of location. Secondly, I closely monitor customer feedback on social media platforms, particularly Google Reviews. Additionally, I compare the sales performance of different product groups across branches, considering various factors. Through surveillance cameras, I monitor the overall work process, promptly reporting any flaws that may affect its quality.

The franchisor provides the means by which the performance data is collected. Franchise systems should strive for an integrated tech stack that automates the collection and storage of data as much as possible to protect the integrity of the data and its later analysis. Regardless of whether the data analysis is supported by a business intelligence tool or custom dashboards and reports, analysis should be done by both the franchisor and franchisee on, at least, a weekly, monthly, quarterly and annual basis. Areas of opportunity seen in the data should guide the franchisor’s support focus and narrow the franchisee’s operational focus. Conversely, the operations of top KPI performers should be further analyzed and shared out for replication.

Once goals are set, how effectively are you collecting and analyzing data? It involves continuous monitoring of key performance indicators such as revenue growth, customer feedback, and operational efficiency. Using a centralized system (i.e. performance dashboard) to gather this data can simplify the process, making it easier for you to spot trends, pinpoint areas of concern, and identify standout performers.

Na minha vis?o, coletar e analisar dados é essencial para avaliar o desempenho dos franqueados de forma objetiva. As decis?es baseadas em dados proporcionam uma vis?o clara do que está funcionando e do que precisa ser ajustado. Ao monitorar indicadores de desempenho como faturamento, taxa de convers?o, satisfa??o do cliente e eficiência operacional, é possível identificar padr?es, prever tendências e agir rapidamente para corrigir desvios. Esse processo permite uma gest?o mais precisa, evitando achismos e fortalecendo a rela??o entre franqueadora e franqueado, com base em resultados reais e mensuráveis.

Numbers tell the real story—whether it’s sales figures, customer reviews, or operational efficiency. But just collecting data isn’t enough. You’ve got to dig into it and understand what it means. What patterns are you seeing? Where are they exceeding expectations? Where are they falling short? If you're only looking at one or two metrics, you're missing the bigger picture. Use software to automate data collection so you’re not chasing down numbers manually. Track sales trends weekly and compare them to industry benchmarks. Review customer feedback. This way, you get a 360-degree view of their performance and can spot issues before they snowball.

In my experience, store audit and inspection reports can be used as a great coaching tool. This allows the franchisee to see where they stand on all aspects of their business. It also strengthens the franchisor/franchisee relationship by collabrating with each other in order to better each others side of the business. As long as audits are used as a tool instead of a whacking stick, it shows the franchisee that they are supported.

Sin capacitación y retroalimentación, los franquiciados no lograrán un alto rendimiento, en las operaciones de sus unidades franquiciadas. La capacitación no sólo es el modo en cómo será transferido inicialmente el know-how, sino la forma para que sigan mejorando en el futuro. Y debe darse tanto a nivel operacional como gerencial. Los franquiciados tienen que aprender a pensar como empresarios, pero ?Crees que 15 días son suficientes para ense?arle a tu franquiciado los 20 a?os de experiencia que tienes? Por lo tanto, ningún manual es una pastilla milagrosa. Sin embargo, con retroalimentación continua y constructiva se puede ir cultivando el liderazgo en nuestros franquiciados.

In my experience, monthly/quarterly live coaching, either virtual or in-person/onsite, has been the most impactful feedback vehicle. There is nothing more powerful than meeting with a franchisee 1:1 and reviewing their performance data together and providing in real time coaching. The coaching should cover both the areas of opportunity as well as the areas of success. The franchisee should leave the coaching session with at least 3 action items that will help move the needle over the next 30/60/90 days. The franchise business coach should take away all the best practices discovered from discussing the franchisee’s wins. Live coaching deepens the relationship with the franchisee while reinforcing the value of investing in a franchise system.

How are you using data to guide your franchisees? Providing constructive feedback and coaching is crucial. This means regularly scheduled meetings where you can discuss performance in the context of the data collected. That being said, it's not just about pointing out what's wrong. It's also celebrating what’s right and offering practical advice on how to improve. Tailored coaching plans that address specific challenges faced by a franchisee can transform this data into actionable insights, fostering growth and improvement across your network.

O feedback, com os dados de desempenho, precisa vir acompanhado de uma plano de a??o e treinamento para ajudar os franqueados a reverter os resultados abaixo do esperado.

Special acknowledgments for high performers goes a long way in a franchise system for ALL franchisees. The most impactful performance celebrations, in my experience, have been: (1) award ceremonies at annual national/regional conferences and conventions; (2) monthly/quarterly live shout outs on Town Hall Meetings; (3) invitations to top performing franchisees to lead e-talks on topics that they have excelled in; and (4) franchisor nominations to represent the franchise base on an advisory counsel.

Uma forma efetiva de que une a avalia??o de desempenho com o reconhecimento é criar um programa de excelência na rede, definindo metas e indicadores n?o apenas de resultados, mas também de padroniza??o e alinhamento com o posicionamento da marca. Estabele?a avalia??es periódicas ao longo do ano e promova um evento onde toda a rede participe e seja entregue o reconhecimento para os melhores colocados no ranking.

Reconhecer e recompensar a excelência é uma estratégia crucial para motivar os franqueados e fortalecer a rede. Quando destacamos os franqueados que se destacam, n?o apenas celebramos suas conquistas, mas também incentivamos todos os outros a se esfor?arem para alcan?ar altos padr?es. Esse reconhecimento pode vir de várias formas, como prêmios, men??es em eventos ou até mesmo b?nus financeiros. Além de aumentar a satisfa??o e a lealdade dos franqueados, essa prática cria um ambiente de competi??o saudável, onde todos se sentem valorizados e motivados a melhorar continuamente. Isso, sem dúvida, resulta em uma rede mais forte e bem-sucedida.

Muchas franquiciadores les temen a las conversaciones difíciles con sus franquiciados- Los números aun no levantan, los pagos de préstamos están ahogando la caja del negocio, no se está recibiendo el soporte que se prometió, etc- Temas que encienden los ánimos. Pero hay que recordar que el silencio y la negación es peor. Un franquiciado en su etapa inicial, está atravesando el valle de la muerte. Muchas veces lo que requiere es sentirse verdaderamente acompa?ado. Una llamada por la noche alentándolo a que ma?ana habrá mejores resultados, o escuchándolo sobre algo que le fastidia en el negocio, aportándole consejos de cómo deberían abordar la situación. Abordar y resolver problemas son en realidad empoderar y apoyar a nuestra franquiciados.

Consistency in reviewing franchisee performance is crucial. The franchisor should have a playbook of established actions to take based on what they’re reading in the data. These actions should be both proactive and reactive. When analysis is regular and strong processes are in place, the franchisor should be able to proactively support franchisees that are performing below benchmarks before they reach the at risk level of performance. Live coaching is an effective support tool to proactively improve franchisee performance. Reactive support should be reserved for managing the franchisees that are at risk of closure, where a day-to-day approach must be taken in order to save from closure or ensure a smooth offboarding of the locations.

Resolver problemas de forma eficaz é essencial para o sucesso de franqueadoras e franqueados. Identificar rapidamente desafios e abordá-los com solu??es práticas minimiza impactos negativos e fortalece a parceria. Criar um canal de comunica??o aberto permite que os franqueados relatem dificuldades, e oferecer suporte proativo na resolu??o de problemas garante alinhamento e foco nos objetivos comuns. Essa abordagem melhora o desempenho individual e contribui para o crescimento da rede como um todo.

This is an often critical recurring step that is overlooked or given low priority by franchise systems, usually due to lack of time and competing priorities. The more a franchisor can reflect on their own processes and update accordingly, the better the health of the entire franchise system. Gathering feedback from external as well as internal partners is invaluable. At the very least, these evaluations should happen biannually; ideally, every quarter there is a review to help improve the evaluation process.

Revisar e ajustar continuamente os processos e estratégias é fundamental para o sucesso de uma rede de franquias. Essa prática permite identificar áreas que precisam de melhorias, além de garantir que os franqueados estejam sempre alinhados com as diretrizes da franqueadora. A revis?o regular das opera??es, feedbacks dos franqueados e análise de resultados ajuda a manter a qualidade e a eficiência do negócio. Ao implementar mudan?as com base nessa revis?o, a franqueadora n?o apenas se adapta às novas demandas do mercado, mas também demonstra compromisso com o sucesso e a satisfa??o de seus franqueados, fortalecendo a rede como um todo.

To check how well franchisees are doing, we look at their money, if they're following rules, if customers are happy, if they're learning well, how they're adapting to the market, if they're following the law, if they talk with us, and how they compare to others in the same business. This helps us make sure they're doing a good job and keeping our brand strong.

There are a few ways to measure franchisee's financial performance: - Potential vs achievement - Investment vs ROI achieved - peer performance with those who have the same duration in ops - competition performance Additionally also evaluate: - Audit scores - Customer acquisition strategies - Leads vs closures - repeat business - Staff retention

Consider the performance of your franchise as it relates to your overall brand vision, mission, ethics and community impact. Review key reports and data to evaluate performance. For example operational targets and efficiencies such as drive thru time, speed of service, rework, customer complaints..these are all great metrics to assess performance.\ Consider not only sales per store, evaluate profitability per store/location. This allows for each franchisee to be evaluated on its own. This is very important and adds value.