The Best KPIs to Improve Franchisee Success

The best franchisor teams maintain their focus on helping franchisees to succeed. One of the most powerful tools they use with their franchisees are KPIs or Key Performance Indicators. These go beyond top-line sales and measure the things that correlate with sustainable business success.

In the popular book, The Franchisor's Guide to Improving Field Visits, Greg Nathan identifies 20 KPIs commonly used in franchise networks to measure franchisee success. This is where franchisees are profitable, deliver a consistently great customer experience, and participate constructively in network initiatives.

At FRI, we recommend that every franchise network has five agreed KPIs that are regularly measured and monitored by franchisees and their field support teams. In this Positive Franchising Update, you'll find 15 fascinating KPIs that were shared by field managers from leading brands attending our most recent Foundation Field Manager Bootcamp.

15 KPIs that Influence Franchisee Success

An important part of our Foundation Field Manager Bootcamps involves participants workshopping the KPIs they use in their networks to measure and monitor franchisee success. While lag KPIs are indicators of past success (e.g. gross profit percentage), lead KPIs can be more useful as they predict future success (e.g. number of client conversations). Here are 15 KPIs that participants in our most recent Bootcamp use to keep their franchisees focused on the things that matter.

1. Staff retention rates (measured as percentage turnover)
2. Staff engagement (measured by engagement survey scores)
3. Customer recommendation ratings (measured by NPS)
4. Online customer reviews (measured by Google Stars and types of comments)
5. Expense-to-revenue ratios (measured as a percentage, e.g. wages, cost of goods)
6. New customers (measured as a weekly number)
7. Repeat customers (measured as a percentage)
8. Customer enquiry to purchase rates (measured as a percentage)
9. Volume of higher-margin product sales (measured as a percentage)
10. On-time customer delivery rates (measured as a percentage)
11. Moving annual turnover (measured as a percentage).
12. Brand alignment scores (measured by compliance audit checklists)
13. Average sales per customer (measured as dollars)
14. Productivity per employee (measured as dollars)
15. Phone calls to existing clients (measured as a number)

Here are two useful questions you may want to debate and discuss as a field support team. Which KPIs do you focus on and why? And are you spending enough time regularly discussing these with your franchisees?