I’ve just returned from the 2016 IFA Convention. One session I particularly enjoyed was a turnaround case study by Catherine Monson, CEO of FASTSIGNS. Catherine took the reins of FASTSIGNS in 2009 as part of a private equity deal that also saw the retirement of the company’s Founder. At the time, same store sales in this 500 strong network were down by 16%.
In a whirlwind keynote address, Catherine outlined 20 specific strategies she implemented over five years that resulted in an impressive 43% increase in same store sales, an increase in average franchisee net profit on sales from 12.9% to 18.1%, and an increase in the franchisor’s annual net profit from $6.9m to $13.2m. What most impressed me was her focus on the metrics used to measure progress against their four strategic goals, which were to increase franchisee profitability, increase average store sales, increase the value of the brand, and increase franchisee satisfaction.
I am often asked by clients what Key Performance Indicators (KPIs) they should be measuring, and we regularly discuss these in FRI’s Summits and Bootcamps. So I was fascinated to hear the list Catherine presented, which I have to say is one of the most comprehensive and well thought out I have seen. With Catherine’s permission I will share them with you here. I strongly recommend you consider how your team could use these to keep everyone in your network focused on what matters. The great thing about well-constructed metrics is they promote transparency and accountability at all levels of a franchise network.
Each franchisee is regularly measured on these KPIs. As you read them you will appreciate the focus these provide, not just for franchisees, but also for the field support team.
Note that some of these reflect the individual franchisee KPIs above, and can be used to measure the performance of regional or field support managers responsible for groups of stores.
These are used to measure the effectiveness of franchisee recruitment managers and recruitment strategies. Are you measuring these?
This is how the franchisor head office team is measured.
There you have it — the ultimate list of high performance franchise KPIs. By the way, while most of these measures relate to financial and sales performance, Catherine Monson was particularly passionate about the KPIs related to franchisee satisfaction. And yes, while these are all connected, when a CEO is so passionate about this one, you know your culture is in good hands. In a future Tip I'll take up the question of what drives a healthy culture.
Since 1990, thousands of franchise executives around the world have enjoyed receiving a regular email tip from FRI’s Founder, Greg Nathan.
These short stories on the psychology of business and everyday life have been likened to “mind brightening pills” as they open our thinking to fresh insights for improving wellbeing, business performance and franchise relationships.
Sign up now to receive your regular free tip from one of the leading thinkers in the world of franchising.