The franchise industry in the UK has grown by 10% in the last four years. The franchise business model combines small business efficiency and creativity with the brand strength and reputation of international success — helping franchisors and franchisees alike stay ahead of the game. However, there are still challenges, particularly when it comes to KPI management.
Consistency is vital to a successful franchise. Franchisors need to make sure that everything from branding to sales success retains a level of uniformity across the network. Effective KPI management is central to improving and regulating performance across your franchise network. However, to do this with the distributed framework of a franchise, you need to think deliberately about the solution you build.
To help simplify the task of KPI management within a franchise setting, we’ve compiled a few tips that will help you build a solution that works for you. No two franchises (or businesses for that matter) are the same. But there are a few key challenges and solutions that unite a successful KPI management solution. That’s exactly what we are going to deliver here.
Facing franchise-specific KPI challenges
KPI management within a franchise is basically like managing KP solutions within a normal business, with a few added challenges thrown on top. If you want to build a successful franchise KPI management solution, this is where you need to start. The main issues you’ll need to keep in mind include:
- Various franchise locations to keep track of
- Potentially different reporting metrics from each franchisee
- A lack of visibility for central management over franchise operations
- A struggle to enforce brand standards that uphold expected customer satisfaction
- The challenge of franchisee-franchisor communication
These, mixed with existing business challenges when setting effective KPIs, leave significant scope for error. Issues especially arise due to the amount of autonomy franchisors must offer franchisees. These are not employees, after all, but independent owners working towards their own goals as well as larger company efforts.
Somehow, franchisors need to hit a balance between autonomy and centralisation to ensure data reporting they can track, and KPI management that’s possible to oversee. Ultimately, efforts like the enforcement of brand strategies, the use of mystery shoppers, and even keeping tabs with field teams are vital for ensuring key performance indicators that maintain essentials, including:
- Brand strategy
- Customer service
- Net promoter scores
- Strategic goals
- And more
The importance of incorporating communication
Communicating KPIs across franchisees is often the first issue franchisors come up against. Sadly, failure here can leave indicators unnoticed, or lay waste to your annual reviews. Poor communication from your franchisees can also pose significant business risks, as you’ll be unable to track KPI progress in the time frames you’ve laid out. Seeing as reviews and oversight are the key indicators of success, this would make the setting of KPIs an entirely pointless exercise.
The answer?
You need to ensure you’re able to share all necessary data and reviews with your franchisees, and that they can send you real-time data updates in return. Remembering the need for autonomy, it’s also vital that you make these processes as easy as possible. Effective communication ultimately hinges around face-to-face meetings and video conferencing. Ultimately, however, this is not enough. To get real-time updates, you need a unified data channel that makes the sharing of actual facts and figures simple and streamlined.
Consider, too, how you share KPI goals. If you’re unclear or uncommunicative about decisions in head office, your franchisees can’t be held responsible for target shortages etc. Yet, it’ll still be your brand that comes under fire from customer complaints as a result.
You can achieve clarity with manual processes — phone calls and clearly outlined emails. However, the best solution to effectively communicate KPIs is a centralised KPI dashboard built out of a business intelligence platform (more on that later). This allows you to communicate specific goals against real data, and track outcomes in real-time, bringing together central data reporting with centralised communication.
Either way, making sure that everyone’s on the same page is your only chance at making the most of your franchise model.
How data centralisation can help
Balancing autonomy and centralisation is vital. But, how exactly can data centralisation help towards useful KPIs moving forward?
In reality, there are a range of reasons why data centralisation is key to success here, and the clue is in the name. Data centralisation literally centralises data from multiple locations, merging results so that franchisors can standardise their reporting mechanisms and thus achieve better tracking across the franchise board. This alone can eliminate a great deal of the challenges we’ve already touched upon.
Ultimately, data centralisation is essential for franchise results that you can track both in comparison to each other and separately. This level of oversight will then play a vital role in the development of every key indicator you implement moving forward. Neither one is possible without the other, and you won’t be able to achieve either if you don’t put centralisation at the heart of your franchise efforts moving forward.
KPI solutions with a new breed of business intelligence
Arranging KPI data and analysis across a broad network of franchisees can seem like a lot of work. Not only will you need to manage centralisation and communication that franchisees can rely on, but you’ll also face a significant data influx. That amount of data alone can make it impossible to glean vital insights despite your efforts to improve communications etc. And, given that insights are the single most valuable indicators for both setting and tracking KPIs, that’s a significant issue in your efforts.
This is why franchisors could also benefit from considering the incorporation of business intelligence into their existing KPI efforts. As well as improving insights, the right BI software can take every pain point off your hands, including that all-important centralisation of communication and data reporting.
KPI-focused, business intelligence platforms offer the opportunity to set and track KPIs from one simple place, promoting consistency and improving KPI performance by around 75%. This alone can make everything from your data collation to your reporting efforts as easy as clicking a button.
Software like this also has the significant benefit of helping you tow that crucial line between franchisee autonomy and data you can use. Instead of having to chase franchisees, KPI dashboards will free you to collect metrics without creating an administrative burden (once set up) or requiring endless meetings. That’s sure to improve franchisee-franchisor relationships, and should lead to much higher levels of happiness and success within your franchise business model.
Factoring KPIs into franchise success
KPIs always matter to business efforts but never is that more the case than with franchise models. Yet, franchisors must prepare for the fact that even seemingly simple KPIs are liable to become complicated. As such, KPI management must be a priority with key pointers in mind, such as:
- Centralisation for group insights
- Communication for efficient data collation
- Clear setting of franchise-wide KPI goals
- BI software to guarantee insights
