Introduction
The foundation of any successful restaurant franchise is built on effectively and efficiently tracking key performance indicators (KPIs). Tracking franchise KPI metrics can help business owners identify areas where improvement may be needed and potential growth opportunities. For Habit Burger Grill franchise owners, tracking the most important franchise KPI metrics is critical to making well-informed decisions, optimizing performance, and maximizing profits.
Knowing how to track these franchise KPI metrics is key to success. In this article, we’ll take a look at the top seven KPI metrics that all Habit Burger Grill franchise owners should track and how to calculate them.
The seven KPIs we will discuss are:
- Average Customer Transaction Value
- Customer satisfaction levels
- Food quality standards
- Number of orders completed per hour
- Profit margins
- Total revenue generated
- Customers acquired year after year
Average Customer Transaction Value
Definition
Average Customer Transaction Value (ACTV) is a key performance indicator used to measure the average value of sales transactions in a Habit Burger Grill franchise.
Benefits of Tracking
ACTV tracking is a great way to measure each customer’s profitability. By understanding how much each customer is spending, you can adjust your operations to increase the overall average. Additionally, tracking average customer transaction value can help you identify the most profitable promotions, discounts, and pricing strategies.
Industry Benchmarks
The average value of customer transactions varies widely between industries and companies. Generally, companies that focus on premium products, services, and experiences will have higher ACTV values than companies that focus on lower cost items.
How to calculate
The average value of customer transactions is calculated by dividing the total sale for the period (excluding taxes and other fees) by the total number of transactions for the period.
Calculation example
For example, if a Habit Burger Grill franchise had ,000 in total sales and 500 total transactions, the ACTV would be calculated as follows:
Tips and Tricks for KPIs
- Make sure you’re tracking the right information to accurately measure average customer transaction value.
- Analyze your pricing and promotional strategies to identify areas where you can increase average customer transaction value.
- Create incentives to encourage customers to purchase more items in each transaction.
- Monitor average customer transaction value over time to identify trends and make adjustments as needed.
Customer satisfaction levels
Definition
Customer Satisfaction Levels (CSL) is a Key Performance Indicator (KPI) that measures the level of customer satisfaction with franchise services and products. The score is based on customer surveys, feedback, and other customer-related data. It serves as a measure of customer loyalty and is used to assess customer retention.
Benefits of Tracking
Tracking customer satisfaction levels is important for franchises to measure the success of their services and products. By tracking customer satisfaction, franchises can identify areas for improvement and take action to improve customer experiences. Additionally, tracking CSL can help franchises understand customer loyalty and retention, which can lead to higher revenue and profits.
Industry Benchmarks
The average customer satisfaction level score in the restaurant industry is 75.3. This score is based on a 100 point scale. The higher the score, the higher the customer satisfaction. Franchises should strive to achieve a score of at least 80 to ensure customer satisfaction.
How to calculate
The Customer Satisfaction Level score is calculated by taking the average of all surveys, feedback, and other data points related to the customer. The formula is:
Calculation example
For example, if a franchise has 20 customer surveys with ratings ranging from 1 to 5 (1 being the lowest, 5 being the highest), the customer satisfaction level score can be calculated as follows:
In this example, the customer satisfaction level score is 3.50, which is below the industry average of 75.3.
Tips and tricks
- Encourage customers to leave reviews and surveys to ensure accurate CSL scores.
- Be sure to address customer concerns and complaints to improve CSL scores.
- Consider offering incentives or rewards to customers who provide feedback or surveys.
Food quality standards
Definition
Food quality standards (FQS) refer to the criteria used to measure the quality of food products available for purchase. Quality standards for food vary from industry to industry, but usually factors of concern such as taste, texture, color and safety. The purpose of food quality standards is to ensure that customers receive safe, high quality food products.
Benefits of Tracking
Tracking food quality standards is important for any business that produces food products as it can help identify areas where improvement is needed. It can also help ensure customers receive consistent, quality food products. Tracking FQS can also help companies identify areas where they exceed industry standards, and thus improve customer loyalty and satisfaction. Additionally, tracking FQs can help companies comply with necessary regulations set by governing bodies.
Industry Benchmarks
FQS references vary from industry to industry, but generally include criteria such as taste, texture, color and safety. For example, in the restaurant industry, FQS may include criteria such as freshness, temperature, presentation, and plating. In the retail food industry, FQS may include criteria such as expiration dates, packaging, and labeling.
How to calculate
Food quality standards can be calculated using a variety of methods, including surveys, customer feedback, and quality assurance testing. Surveys can be used to measure customer satisfaction and feedback, while quality assurance testing can be used to measure food quality. Additionally, companies can use a rating system to measure the quality of their food products, with higher scores indicating higher quality standards.
Calculation example
For example, if a restaurant has a maximum food score of 10 and its average food score is 8, the FQS would be calculated as follows:
Tips and Tricks for KPIs
- Regularly monitor customer feedback to identify areas for improvement.
- Perform quality assurance testing on foods to ensure they meet the necessary FQS benchmarks.
- Create a rating system to measure food quality.
- Make sure all foods are within the necessary safety standards.
Number of orders completed per hour
Definition
The number of orders completed per hour is a key performance indicator (KPI) that measures the rate at which orders are completed in a Habit Burger Grill franchise. This KPI is used to ensure orders are completed in an efficient and timely manner.
Benefits of Tracking
Tracking the number of orders completed per hour is beneficial for a number of reasons. It helps ensure that orders are processed quickly and efficiently. It can also help identify areas for improvement within the franchise. Moreover, it can be used to measure the performance of employees and staff.
Industry Benchmarks
The industry benchmark for the number of orders completed per hour is around 20 orders. This benchmark is based on the average number of orders that can be completed in an hour. It is important to note that this reference may vary depending on the size and complexity of the order.
How to calculate
The formula to calculate the number of orders completed per hour is:
Calculation example
For example, if a Habit Burger Grill franchise completes 100 orders in 5 hours, the number of orders completed per hour is:
Tips and Tricks for KPIs
- Ensure orders are completed in a timely manner.
- Monitor the number of orders completed per hour to ensure that the franchise meets the industry index.
- Identify areas where the process can be improved to increase the number of orders completed per hour.
- Encourage staff and employees to work efficiently and complete orders quickly.
Profit margins
Definition
Profit margin is a KPI (key performance indicator) that measures a company’s profitability by comparing total revenue to total expenses. It is expressed as a percentage and calculated by taking net income (income minus expenses) and dividing it by total income.
Benefits of Tracking
- It provides an overall measure of the efficiency and effectiveness of the business in generating profits.
- It helps identify weak areas where expenses are too high or income is too low.
- It helps to identify cost reduction opportunities.
- It helps in comparing the profitability of different products and services.
Industry Benchmarks
The average profit margin in the quick service restaurant industry is around 4-5%. However, this varies from franchise to franchise. The Habit Burger Grill franchise has an average profit margin of 6-8%.
How to calculate
The formula to calculate the Habit Burger Grill franchise profit margin is as follows:
Calculation example
For example, if the Habit Burger Grill franchise has net income of ,000 and total sales of ,000, the profit margin would be 25%:
Tips and Tricks for Tracking KPIs
- It is important to track the profit margin regularly to identify any patterns or trends.
- Profit margin should be compared to industry benchmarks to identify any opportunities for improvement.
- Profit margin should be tracked in conjunction with other KPIs such as sales, costs, and expenses to get a holistic view of franchise performance.
Total revenue generated
Definition
Total revenue generated is a key performance indicator (KPI) used to measure the total amount of money earned from product and service sales by a Habit Burger Grill franchise. This KPI is an important metric for evaluating the financial performance of the franchise.
Benefits of Tracking
Tracking the total revenue generated is important for monitoring the financial performance of the franchise. It can help identify areas for improvement and identify opportunities for growth. Additionally, tracking this KPI can help identify pricing, inventory, or customer service issues that may be impacting franchise results.
Industry Benchmarks
Industry benchmarks for total revenue generated vary by franchise size and type. Generally, the higher the total revenue generated, the higher the performance of the franchise. Some general benchmarks include:
- Small franchises: 0,000 to 0,000 in total revenue generated
- Medium deductibles: 0,000 to 0,000 in total revenue generated
- Large franchises: 0,000 to 0,000 in total revenue generated
How to calculate
The total revenue generated is calculated by subtracting the cost of goods sold (COGS) from the total sales revenue. The formula for calculating the total revenue generated is as follows:
Calculation example
For example, if a Habit Burger Grill franchise has total revenue of 0,000 and COGs of 0,000, the total revenue generated would be calculated as follows:
Tips and Tricks for Tracking KPIs
- Regularly track total revenue generated to identify trends and measure progress.
- Compare total revenue generated to industry benchmarks to identify areas for improvement.
- Monitor the COG to ensure it is in line with the revenue generated.
- Analyze customer data to identify growth opportunities.
Customers acquired year after year
Definition
Year-over-year (YOY) customers acquired is a key performance indicator (KPI) used to measure the number of new customers gained over a period of time, typically a year. This metric is important for measuring business growth and the effectiveness of customer acquisition strategies.
Benefits of Tracking
Tracking this metric gives you a better understanding of the effectiveness of your customer acquisition efforts and the overall growth of your business. This information may be used to make decisions about marketing strategies, pricing and product features.
Industry Benchmarks
The industry benchmark for customers gained year over year varies depending on the specific industry. For example, a fast food franchise may want to acquire more than 10% of new customers each year, while a retail store may want to acquire more than 5%.
How to calculate
To calculate the customers acquired from year to year, use the following formula:
Calculation example
For example, if a fast food franchise acquires 1,000 new customers in 2018 and 1,200 new customers in 2019, they would calculate their year-over-year customer acquisition as follows:
Tips and tricks
- This metric should be tracked over time to gain insight into long-term trends.
- It’s important to follow industry benchmarks to ensure your customer acquisition efforts are in line with other companies in the same industry.
- This metric should be used in conjunction with other KPIs, such as customer retention rate, to get a complete view of customer acquisition.
Conclusion
For successful franchise operation, all Burger Habit grill owners must ensure that key performance indicators are tracked and optimized on-going. By focusing on KPI metrics from seven listed franchises, owners can more effectively gauge their restaurant’s success and drive future growth.
Tracking these seven KPI metrics, however, is just the start. Owners should also measure vendor performance, regularly analyze customer feedback, and evaluate franchise performance at least twice a year.
By regularly tracking and evaluating these important KPI metrics, Habit Burger Grill franchise owners can gain insight into their operations, identify areas for improvement, and optimize performance for success.
- Home
- Average Customer Transaction Value
- Customer satisfaction levels
- Food quality standards
- Number of orders completed per hour
- Profit margins
- Total revenue generated
- Customers acquired year after year