How to Track and Calculate Key Performance Indicators for Jimmy Johns Franchises

Introduction

Running a successful franchise requires careful tracking of important metrics. As a franchise owner, you need to know how to track and calculate key performance indicators (KPIs) for your business. This is especially true for the Jimmy Johns franchise, whose top seven KPIs are:

• Total income
• Net revenue
• Customer acquisition rate
• Gross margin
• Average order value
• Customer retention rate
• Productivity per employee

In this blog post, we’ll discuss how you can track and calculate these seven KPIs and why they’re important to running your Jimmy Johns franchise.

Total income

Definition

Total revenue is a key performance indicator (KPI) that measures the total amount of money generated by a business in a given period. It is one of the basic measures of business performance and is used to track the efficiency of business operations.

Benefits of Tracking

Tracking total revenue is essential for any organization as it is a strong indicator of overall business performance. By tracking total revenue, businesses can monitor the success of various campaigns, compare the revenue generated to the costs incurred, and determine the profitability of the business.

Industry Benchmarks

Total revenue is a relative measure and there are no specific benchmarks for it. However, businesses can compare their total revenue with the industry average and use that to better understand how their business is performing.

How to calculate

Total revenue is calculated by adding up all the revenue generated by the business in a given period. The formula for total revenue is:

Calculation example

Suppose a Jimmy John franchise made 0,000 in sales revenue in a given month. Additionally, they earned ,000 of other income such as rent payments and interest on investments. The total revenue for that month would be:

Tips and tricks to increase total revenue

• Increasing Sales: Increasing sales is one of the most effective ways to increase total revenue. Businesses can do this by offering discounts, running promotions, and targeting new markets.
• Cut costs: Cutting costs can also help increase total revenue. Businesses can reduce costs by negotiating better deals with suppliers, reducing unnecessary expenses and automating processes.
• Improve efficiency: Improving efficiency can help businesses increase total revenue. Companies can do this by streamlining processes, investing in technology, and providing staff training.

Net revenue

Definition

Net profit is the total amount of money earned by a business minus any fees or expenses associated with running the business. It is also called net or bottom line profit, and is usually the ultimate goal of any business.

Benefits of Tracking

Tracking net profit can provide insight into the overall financial health of a business. It is one of the most important metrics that can be tracked and can be used to identify areas for improvement or potential cost savings. Additionally, the net profit can be used to compare the company’s performance to other companies in the same industry.

Industry Benchmarks

Net profit can vary widely between sectors, with some industries having higher net profit than others. Generally, businesses in the same industry should have a similar net income, and if your business is not performing in line with others in your industry, it may be a sign that there are areas that need to be addressed.

How to calculate

Net profit is calculated by subtracting all costs and expenses from total revenue. The formula for net income is:

Calculation example

For example, if a Jimmy Johns franchise has total revenue of 0,000 and total expenses of ,000, the net profit would be:

Tips and tricks

• Tracking net income over time can provide insight into the financial health of the business.
• Net profit can be used to compare performance to other companies in the same industry.
• The bottom line should be closely monitored to ensure that the company is meeting its financial goals.
• Look for areas of improvement and potential savings to increase net income.

Customer acquisition rate

Definition

Customer acquisition rate (CAR) is a key performance indicator (KPI) used to measure the success of customer acquisition campaigns and strategies. This is a metric that measures the number of new customers acquired in a given time period, usually expressed as a percentage. This is an important metric for any business as it is used to gauge the effectiveness of customer acquisition campaigns and strategies.

Benefits of Tracking

Car tracking is important for a successful business because it helps understand the customer acquisition process and provides insight into customer behavior. Additionally, car tracking allows businesses to identify their target market, allocate resources efficiently, and measure the effectiveness of their customer acquisition strategies.

Industry Benchmarks

The industry benchmark for customer acquisition rate varies by industry and target market. Typically, a good customer acquisition rate is around 3-5%. However, this varies by industry and target market.

How to calculate

The customer acquisition rate can be calculated as follows:

Calculation example

For example, if a Jimmy Johns franchise had 500 customers in a given period and acquired 100 new customers, the customer acquisition rate would be:

Tips and Tricks for KPIs

• Regularly track customer acquisition rate to understand customer behavior and trends.
• Identify and analyze factors that influence customer acquisition rate.
• Focus on customer retention strategies to ensure long-term success.
• Compare customer acquisition rate with industry benchmarks for insights.

Gross margin

Definition

Gross margin is a key performance indicator that represents the difference between a company’s revenue and the cost of goods sold (COG). It is used to measure the financial performance and profitability of a business. The higher the gross margin, the more profitable the business.

Benefits of Tracking

Tracking gross margin is important for any business because it helps identify areas where costs can be reduced or increased to improve profitability. It also helps to compare performance over time and across different product lines.

Industry Benchmarks

The average gross margin for the Jimmy Johns franchise is around 50%. This means that the business is able to generate of profit for every of revenue.

How to calculate

Gross margin is calculated as follows:

Calculation example

For example, if a Jimmy Johns franchise has total revenues of 0,000 and total cogs of ,000, the gross margin would be:

Tips and Tricks for KPIs

• Be aware of changes in cost of goods sold. This can have a direct impact on the gross margin.
• Look for ways to reduce waste, such as unused inventory or expired products.
• Gross margin should be compared to industry benchmarks to ensure your franchise is performing as expected.

Average order value

Definition

Average order value (AOV) is a KPI metric used by Jimmy Johns franchises to measure the average amount of each order placed by customers. It is a critical measure of the success of their operations, as it can be used to understand the financial performance of sales.

Benefits of Tracking

Tracking average order value can provide valuable insight into the effectiveness of sales and marketing efforts, as well as overall franchise profitability. By understanding the average amount of each order, Jimmy Johns franchises can tailor their strategies to increase customer loyalty and maximize profits.

Industry Benchmarks

Jimmy Johns franchises can compare their AOV to industry benchmarks to determine how their performance measures up. According to the National Restaurant Association, the average order value for quick service restaurants (QSR) is around .50.

How to calculate

The average order value can be calculated by dividing the total sales by the total number of orders:

Calculation example

For example, if a Jimmy Johns franchise had total sales of ,000 and total orders of 1,500, then the AOV would be .67:

KPI Tips and Tricks

• Regularly monitor average command value to identify trends and adjust strategies accordingly.
• Focus on increasing customer loyalty to increase average order value.
• Implement promotions and discounts to increase average order value.
• Analyze customer data to better understand the factors that lead to higher average order values.

Customer retention rate

Definition

Customer retention rate is the percentage of customers who remain active with a business or service after a certain period of time. It is a measure of customer loyalty and is used to determine a company’s success in retaining customers.

Benefits of Tracking

Tracking customer retention rate provides invaluable insight into the health of a business. It can be used to measure customer satisfaction, identify areas for improvement, and understand the effectiveness of marketing strategies.

Industry Benchmarks

The average customer retention rate for the Jimmy Johns franchise is 70%. This number can vary depending on location and type of business, but it’s a good benchmark to look up.

How to calculate

Or:
E = number of customers at the end of a period
N = number of new customers during the period
S = number of customers at the beginning of the period

Calculation example

For example, if a Jimmy Johns franchise had 1,000 customers at the start of the year and gained 200 new customers during the year, but ended the year with 1,050 customers, their customer retention rate would be :

Which equals 85%.

KPI Tips and Tricks

• Track customer retention rate over time and look for trends.
• Focus on quality customer service and customer experience.
• Encourage customer feedback and use it to improve your product or service.
• Offer incentives and rewards to encourage customer loyalty.
• Monitor your competitors’ customer retention rates for comparison.

Productivity per employee

Definition

Productivity per employee is a key performance indicator (KPI) used to measure how effectively and efficiently each employee is working. This metric examines the amount of work produced by an employee, relative to the time spent at work. This metric can be used to measure a company’s overall productivity, as well as the performance of individual employees.

Benefits of Tracking

Tracking productivity by employee can be beneficial for a variety of reasons. It can help identify areas where employees may need additional training or support, identify areas where processes may need improvement, and highlight areas where employees excel. . Additionally, tracking this metric can provide insight into how to allocate resources more effectively and efficiently.

Industry Benchmarks

There is no single benchmark for productivity per employee as it can vary widely from industry to industry. Generally, the higher the productivity per employee, the more efficient and effective a business is. Companies should seek productivity per employee above the industry average.

How to calculate

The formula for calculating productivity per employee is as follows:

Calculation example

For example, let’s say a Jimmy John franchise has a total production of 500 sandwiches in one week. If the franchise has 10 employees, the productivity per employee would be calculated as follows:

Tips and Tricks for KPIs

• Set productivity goals to ensure employees are performing at an optimal level.
• Track productivity over a period of time to identify trends or patterns.
• Identify areas where processes or resources may need to be improved.
• Reward employees for meeting or exceeding productivity goals.

Conclusion

Jimmy Johns is a successful and successful franchise, and much of its success is due to effective KPI tracking and calculation. By taking the time to track and calculate the seven key KPIs of Total Revenue, Net Profit, Customer Acquisition Rate, Gross Margin, Average Order Value, Customer Retention Rate and productivity per employee, franchise owners will be able to better manage and grow their business.