6 Key Performance Indicators for Evaluating Franchise Locations

Discover six basic measures that can help you monitor individual locations

If you operate a franchise business—or a business with multiple brick and mortar locations—you need to monitor performance at each location carefully. Not only does this ensure you are able to provide support to franchisees when they need it; it also helps you understand your own business. While there will be many Key Performance Indicators (KPIs) to track, you will want to be sure to address these six basic measures of success when monitoring your locations:

Profit

Obviously, a successful franchise location should be turning a profit. You will definitely want to track profits and pay close attention to upward and downward trends. If a location is trending upward, you can analyze it to see if you can get insights that will help you replicate its success at other locations. And if it is trending downwards, you can dig into the details to find the root cause.

Liquidity

Just because a franchise location is turning a profit doesn’t necessarily mean that it is financially healthy. That’s why it’s important to keep an eye on liquidity. If a location has enough liquidity to meet immediate and short-term obligations, great. If not, you know it is time to examine the trends behind the increasing liquidity pressure to see how the situation can be improved.

Sales

Sales is a big-picture KPI that incorporates many more specific metrics such as number of transactions, number of customers, average sale amount, etc. Tracking total sales is an excellent way to make sure you get a red flag when a location needs help with any of these underlying metrics.

Labor Costs

Labor costs can vary considerably between franchise locations, and when they do, it’s almost always due to something one location is doing differently from the rest. It is wise to keep an eye on labor costs because they can help point you to situations where there is room for improvement that can benefit the location and the brand as a whole.

Costs of Goods Sold

Knowing the Cost of Goods Sold (COGS) or other direct expenses gives you important insight into the overall efficiency and effectiveness of the individual location. If one location is lagging behind the rest, you can dig into the specific KPIs that fall affect COGS and discover ways to correct the problem.

Customer Satisfaction

Customer satisfaction is a must-track for any franchise business, because the success of your overall brand depends on it. If customers are unhappy at one location, this will affect how they perceive your brand as a whole. It could even cost you business at other locations. Important metrics to track to understand how well a location is serving its customers include repeat business, purchase frequency, reduced sensitivity to price, etc.

How Can You Gather this Information?

In order to track and analyze performance at individual franchise locations—and compare them to one another—you need the right tools. MyFieldAudits is an excellent option. It includes tools that allow you to gather and analyze information on all kinds of KPIs and display them in easy-to-use digital dashboard reports. You can even use it for site audits. It’s easy to implement because it requires no new hardware or staff. To learn more about MyFieldAudits, contact us at info@MyFieldAudits.com.