CBCS Financial & Credit Management

What is Data Collection and Benchmarking?

Benchmarking is of course..... the process of comparing business processes and performing metrics to industry bests or best practices from other companies within an industry.  For franchisors though, there is another definition, comparing performance metrics internally though an analysis of their franchisee network. Whilst this is achievable because in the main the barriers to obtaining information ( i.e confidentiality) are largely removed, it is still a costly and time consuming process...

Nonetheless it is critically important for a franchisor's support team to have a good grasp of the networks performance metrics; 1) to incorporporate into the franchise recruitment process and 2) to ensure that support provided to the franchise network is both adequate and all encompassing. Data Collection and network benchmarking is therefore an important and often forgotten ally to the franchisor.

How many of your franchisees provide you with their financial data in compliance with their franchise agreement? Probably not many based on our experience. Even if they do, once you have the data, does anyone actually do anything with it, or do you just rely on the declarations made each month to quantify how your franchise network is doing?

CBCS already offers a comprehensive franchise audit service to help you monitor your network and keep on top of levels of under-declared sales or rogue franchisees. Many will know also that we offer a data collection service to allow you to keep on top of your franchisees financials, without antagonising the franchise relationship by requesting an audit be carried out. We have now taken this offering a step further with our Franchisee Data Collection and Benchmarking Service…

 Franchise Network Benchmarking

For as little as £25 per franchisee, all you do is let your network know that we will be contacting them, provide us with basic franchisee details and your specific requirements and we will do the rest. So for a network of 35 franchisees, a full financial analysis of your network for less than £900… (note: standard cost £25 can increase to maximum of £50 per franchisee depending on number of collection attempts and complexity of data. An extra £5 chargeable per franchisee for each additional metric to be collected.)

In the attached example a fictitious franchise network, we have collected basic financials and VAT declaration details. From here we have determined a summary of the network which shows amongst other things: Top 5 overall performers, Top 5 Net Profit and 11 franchisees with over £7k of under-declarations.

Obviously you can add a whole multitude of benchmarking factors to be analysed, ( e.g. rates per hour, staff costs and advertising costs) potentially reducing your costs and time and those of your franchisees, with all the data collected and analysed for you. And once you have all the data, you can incentive your top performers by perhaps offering a discounted MSF or reduced advertising levy or presenting a coveted prize at your annual conference. That way your franchisees can see a material benefit to providing this information.

The benefits to the franchisor are clear:

  • Collect data from franchisees to ensure adherence to franchise agreement for reporting of company accounts etc.
  • Analyse data from franchisees
  • Determine under-declarations for potential future audit
  • Look for areas where franchisee underperforming to ensure adequacy of future support
  • Benchmark against network
  • Incentivise based on full network results
  • Data Collection helps makes franchisees clean up their act

Do you want to know more?

You can contact us by e-mail, by phone or complete the on-line form. Contact us