Franchisees and franchisors alike have a resource that is often underutilized: a network of knowledge and practices. The advantage of joining a banner isn't just that it provides the necessary resources (market, "user guide," products, know-how, sales resources, marketing resources, brand, etc.) to minimize risks. Indeed, the major advantage of a sales network is that it can benefit from the banner's best practices to replicate them within its own sales outlet and thus improve its overall performance.
Franchisors, do you know your network's best practices?
Within a single company, there are multiple sources of information collection and storage. There may be multiple POS and accounting systems, incomplete or manual information transfer methods (Excel), or unidentified comparison elements.
To understand if best practices are in place, do you have the answers to these simple questions: What percentage of costs are salaries in a successful retail outlet? What is the impact of the concept or the province on sales? What are the best practices related to seasonality? Does compliance with the operations manual impact sales?
1. The best practice management process involves identifying information sources and flows (transfers). Creating a knowledge map can help identify knowledge hubs and key stakeholders in knowledge management.
2. Identification of key performance indicators at the level of the different departments (customer satisfaction, retention rate, margin, turnover, etc.).
3. Implement software to centralize all network data (CRM, document base, finances, operations, audits, etc.).
4. Create reports within the software to track indicators individually or in aggregate and disseminate the information to the various stakeholders. These analyses must be based on comparative elements (type of concept, size, location, etc.) to benchmark similar points of sale, and thus identify the differences between one successful point of sale and another.
My tools are now in place to enable me to identify best practices based on the characteristics of the point of sale and to share them with the members of the franchise network in order to provide them with new insights.
Franchisees, are you performing well in relation to your network?
I have been able to observe the improvement or deterioration of certain indicators from one year to the next (sales, margins, cash flow, average invoice, revenue per capita), but am I performing well compared to the network to which I belong?
Many franchisees are reluctant to share their figures and practices with the rest of the network for fear of internal competition, whether from franchisees or the franchisor. Despite popular belief, this rarely happens because exclusivity zones help prevent internal competition. Trust is also a key characteristic in the success of a franchise, as it relies primarily on "give and take." A customer living in Ottawa who is satisfied with the franchisee in their city will be loyal and, when traveling, will go to a franchisee of the same brand rather than an external competitor.
Sharing information and building a community of practice is beneficial for everyone. A more efficient network improves brand image by ensuring the same experience and quality of service from one point of sale to the next. A successful network attracts new franchise candidates, thus improving the franchise's catchment area and reach.
As a franchisee, it's helpful for me to be able to easily access my performance, whether financial or operational, so I can improve year-on-year and understand which strategies work best. I also need to be able to access an anonymized benchmark of franchisees similar to me so I can compare my management and discover areas for improvement. The more easily accessible information I have about my point of sale and that of a comparable panel, the more efficient my management becomes and allows me to be proactive.
Marie Dubernais
Country Manager Canada