Article by Laurent Dubernais, CEO of Synergee
The forecast, a guarantee of anticipation and responsiveness for both franchisee and franchisor
It is said that to manage is to foresee. Conversely, forecasting is about giving yourself the means to steer. In short, it's in the interest of retailers of all sizes to get to work on their forecasts, so as not to sail blindly. In these times of economic slowdown, this is more than salutary!
In a network, unity is strength. The forecast provides a tool around which franchisor and franchisees can move forward together: beneficial to each outlet, it also serves the network as a whole by setting a motivating collegial course. So there's plenty of scope for a win-win dynamic within a secure framework, provided that financial data are exchanged.
A quick reminder: the forecast, more precisely
The beneficial effect of forecasts is first and foremost decision-making: it's easier and more efficient to arbitrate choices when you know what you're aiming for. In addition, they enable you to situate and adjust your business and its various levers along the way, by setting a benchmark throughout the year. On a day-to-day basis, forecasts can also be used to set up practical tools such as dashboards and track key indicators.
Increasingly essential, the forecast can be adapted according to the relevant criteria - sales, margin rate, expenses, etc. The anticipated duration can also be adapted: a few months, a year or more, depending on the company's context. The network, for example, can give itself the means to best prepare for the next financial year or the launch of a new product.
Above all, the forecast helps franchisees
In terms of forecasting, the franchisor provides a general forecast for each outlet. By aggregating franchisee figures, with the support of a technological solution that ensures the production of a reliable forecast, the franchisor can help franchisees achieve their objectives. He can also observe trends for his network, important information for all outlets. For the franchisee, there's no question of losing control over their data, as confidentiality is guaranteed. On the contrary, in the event of financial difficulties, they receive support from their franchisor. In fact, thanks to the management tools set up by head office, franchisors and franchisees can anticipate problems together... and find solutions together.
It's a real added value for franchisees, who then operate within a frame of reference. In fact, networks such as Mr. Bricolage and Temporis in France that have adopted forecasting are very enthusiastic about it. Definitely, a network that adopts a management solution equips itself with a structuring tool for both franchisees and the network head. Not to be overlooked, in this case all benefit from the expertise and proven methodology of the technology partner who publishes the solution.
Forecasting, a virtuous circle
Drawing up a budget for the first time is a difficult exercise, forcing you to ask yourself many questions. What kind of sales growth can I expect in the new financial year, and on which product families will my profit margin be eroded? To answer these questions, you need to consider a number of hypotheses. Comparing forecasts with actual results gives us a better understanding of the outlet's business, and strengthens our ability to predict the future. After a few years of this perilous exercise, every franchisee improves his or her acuity.
Network management, relations with financial partners, legal aspects... other virtues of forecasting
Within the network, the forecast becomes a motivating factor for each sales outlet, thanks to benchmarking. Outside the network, the presentation of a forecast in a 3, 5 or 7-year business plan is reassuring for financiers. Legally, franchisors are not obliged to provide forecasts, but if they do, the information must be reliable. Another argument in favor of a management solution that facilitates forecasting.
Given all its benefits and the positive feedback from numerous networks, forecasting is a must!
Laurent Dubernais, Synergee CEO
