Discover the 7 Best Franchise KPI KPI Metrics

Introduction

The Chesters Franchise has worked hard to ensure its franchisees are profitable and successful. To assess the success of its franchisees, Chesters Franchise uses Key Performance Indicators (KPIs). By tracking and calculating these KPIs, the Chesters franchise can monitor areas of the business that excel and need extra attention. In this blog post, we focus on the top seven Chesters franchise KPI metrics, how to track and calculate them, and what each one means.

Franchise banking income

Definition

Agency store revenue is a key performance indicator (KPI) that measures the total sales generated by a single agency store over a period of time. This is an important metric for franchise owners and managers as it reflects store performance and provides insight into how the store is performing in terms of sales.

Benefits of Tracking

Tracking agency store revenue offers a number of benefits to franchise owners and managers. First, it provides a way to measure store performance and compare it to other stores in the same franchise chain. It allows franchise owners and managers to identify areas for improvement and set goals for the store.

Additionally, agency store revenue tracking can be used to identify sales trends and to develop strategies to increase sales. This can help ensure the store is meeting its goals and maximizing its potential.

Industry Benchmarks

Industry benchmarks for agency store revenues vary by type of business and size of store. However, it is important to keep in mind that these benchmarks should only be used as a guide and not as a definitive measure of success. It is also important to note that benchmarks may change over time as the industry evolves.

How to calculate

Agency store revenue can be calculated by increasing the total sales of each agency store over a period of time. The formula for calculating agency store revenue is:

Calculation example

For example, let’s say a franchise has three stores and each store generated ,000 in sales in the last month. Agency store revenue for last month would be:

Tips and Tricks for KPIs

• Track agency store revenue over time to identify sales trends.
• Compare agency store revenue to industry benchmarks to gauge performance.
• Set goals for franchise revenue and the progression of those goals.
• Strategize to increase agency store revenue.

Franchise store profitability

Definition

Franchise store profitability is a key performance indicator (KPI) that measures the financial performance of a store in a franchise system. It is calculated by taking the revenue generated by the store and subtracting the total expenses associated with IT, including rent, labor, and other costs.

Benefits of Tracking

Tracking franchise store profitability is important for franchise systems because it allows them to understand how well each store is performing. This information can be used to identify trends, adjust operational strategies and allocate resources to ensure each store is profitable.

Tracking franchise store profitability also helps franchise systems benchmark performance across stores and identify areas for improvement. This can ensure that each store operates efficiently and generates as much revenue as possible.

Industry Benchmarks

The industry benchmark for franchise bank profitability is typically around 5%. This means that a store should generate at least 5% of its total revenue after deducting all expenses associated with running the store.

How to calculate

The profitability of the agency store can be calculated using the following formula:

Calculation example

For example, if a store generates 0,000 in revenue and has ,000 in expenses, the store’s profitability would be calculated as follows:

Tips and tricks

• Track agency store profitability regularly to ensure each store is operating as planned.
• Compare performance across stores and identify areas for improvement.
• Be sure to include all expenses associated with running the store to get an accurate calculation of profitability.
• Use industry benchmarks to measure performance and identify areas for improvement.

Number of franchise transactions

Definition

The number of franchise transactions is a key performance indicator (KPI) that measures the number of sales transactions made by franchise owners within a given time frame. This metric is important to track because it provides insight into franchise success and can be used to measure the performance of individual franchise locations.

Benefits of Tracking

Tracking this KPI can benefit franchise owners in several ways. It can help franchise owners identify which locations are doing the best and which locations need improvement. Tracking this metric can also help determine the effectiveness of marketing campaigns, as well as the effectiveness of new products or services. Additionally, tracking this metric can help franchise owners set sales goals and objectives.

Industry Benchmarks

The industry benchmark for this KPI varies by franchise type. Generally, successful franchises will have a high number of transactions compared to their competitors. Additionally, the number of transactions should increase steadily over time, indicating that the franchise is growing and succeeding.

How to calculate

The formula to calculate the number of franchise transactions is:

Calculation example

For example, if a franchise has 10 locations and 100 sales made by franchise owners, the number of transactions would be calculated as follows:

KPI Tips and Tricks

• Track this KPI regularly to get an accurate picture of franchise success.
• Compare transaction counts to industry benchmarks to gauge performance.
• Analyze the number of transactions to identify areas for improvement.
• Adjust marketing strategies and campaigns to increase the number of transactions.

Average Franchise Transaction Value

Definition

Average Franchise Transaction Value (AFTV) is a key performance indicator (KPI) that measures the average amount generated from a franchise sale. It can be used to measure the overall performance of a franchise system and to inform decisions on pricing strategies and marketing efforts.

Benefits of Tracking

AFTV tracking is beneficial for franchisees and franchisors. It helps franchisees understand how their franchise is performing against the industry standard, and it can help franchisors identify potential pricing and marketing opportunities. AFTV also provides a useful metric for evaluating the success of franchise growth initiatives.

Industry Benchmarks

The average AFTV of a franchise system is usually in the range of ,000 to ,000 per transaction. However, this figure can vary depending on the type of franchise and the market in which it operates. It is important to track the AFTV of a franchise system over time to compare performance against industry benchmarks.

How to calculate

The AFTV of a franchise system can be calculated by taking the total revenue generated from franchise sales and dividing it by the total number of transactions. The resulting figure is the average value of the franchise transaction.

Calculation example

For example, if a franchise system generated 0,000 in revenue from franchise sales and experienced 10 transactions, the AFTV would be calculated as follows:

Tips and tricks to maximize KPIs

• Focus on providing value-added services to increase the value of every franchise transaction.
• Offer discounts and promotions to increase overall franchise sales.
• Monitor industry benchmarks to ensure your franchise system is operating at a competitive level.
• AFTV tracking over time to measure progress of growth initiatives.

Customer Satisfaction Rating

Definition

Customer Satisfaction Rating (CSR) is a metric that measures customer satisfaction with the quality of a product or service. CSR is usually calculated by collecting customer feedback and analyzing it against predetermined criteria. CSR is a key performance indicator (KPI) that helps companies understand how satisfied their customers are with their products and services.

Benefits of Tracking

• Provides insight into customer experience and loyalty
• Helps companies make decisions about product design and customer service
• Ensures customer retention and loyalty

Industry Benchmarks

The average customer satisfaction rating for most industries is around 80%. However, this can vary greatly depending on the industry and the product/service offered.

How to calculate

Calculation example

For example, if a company surveyed 100 customers and received 70 positive responses, the customer satisfaction rating would be 70%.

Tips and tricks

• Use customer feedback surveys to collect customer satisfaction data
• Regularly analyze customer feedback to identify areas for improvement
• Set goals to improve customer satisfaction over time

Employee Satisfaction Assessment

Definition

Employee Satisfaction Rating is a KPI metric used to measure a company’s level of employee satisfaction. This is a critical metric as it provides insight into how employees feel about their work and their overall work environment.

Benefits of Tracking

Tracking employee satisfaction rating provides valuable insights into how employees view their jobs, their supervisors, and how the organization is run. This metric can be used to identify areas of dissatisfaction and take action to resolve them. Tracking employee satisfaction rating also provides an indication of overall company morale and can be used to inform HR policies.

Industry Benchmarks

The industry benchmark for employee satisfaction rating is usually a score of 80 or higher. A score below 80 may indicate that the organization needs to take action to improve the work environment and address dissatisfaction issues.

How to calculate

The employee satisfaction rating is calculated by taking the average of responses to a survey given to employees. The survey should include questions about their job satisfaction, their feelings toward their supervisors, and their overall opinion of the organization.

Calculation example

For example, if the survey was given to 100 employees and the average response to the questions was 8.5, the employee satisfaction rating would be calculated as follows:

Tips and tricks

• Surveys should be designed to capture all aspects of employee satisfaction, including job satisfaction, satisfaction with supervisors, and overall opinion of the organization.
• Be sure to include questions that capture the opinions of all employees, including those who may be dissatisfied.
• Be sure to track the employee satisfaction rating regularly, as this will help identify any areas of dissatisfaction quickly.
• Consider using an automated platform to collect and analyze survey responses.

Retention of franchise store customers

Definition

Customer retention is a key performance indicator (KPI) that measures the total number of customers who continue to patronize an agency store over a period of time. It is a measure of customer loyalty and a key metric in determining the success of a franchise store.

Benefits of Tracking

Tracking franchise store customer retention is beneficial for franchise owners as it provides insight into their store performance and customer loyalty. It is also important for understanding the effectiveness of marketing campaigns, customer service initiatives, and store operations.

Industry Benchmarks

The industry benchmark for franchise customer retention is typically between 80-90%. This means that 80-90% of customers who have visited an agency store in the past will return to the same store in the future.

How to calculate

The franchise store customer retention can be calculated using the following formula:

Calculation example

For example, if an agency store had 100 customers at the start of the period and 10 new customers during the period, and had 105 customers at the end of the period, the customer retention rate would be calculated as follows:

KPI Tips and Tricks

• Track customer retention on a monthly or quarterly basis to identify any trends or patterns.
• Analyze customer retention data to identify areas for improvement in store operations, customer service and marketing campaigns.
• Use customer loyalty programs to increase customer retention and increase sales.

Conclusion

The Chesters Franchise offers a wide range of KPIs to monitor the performance of its franchises. By tracking and calculating these KPIs, the Chesters franchise can gain valuable insight into which areas of their business need more attention. The seven KPIs discussed in this blog post are revenue, profitability, number of deals, average deal value, customer satisfaction, employee satisfaction, and customer retention. By tracking and calculating these KPIs, the Chesters Franchise can ensure that its franchisees remain profitable and successful over the long term.