Large National Franchisor

A fast-growing franchisor wanted to help franchisees shine the light on profitability and cash flow. They had certain data maintained centrally but it was only a small part of the financial picture. The partial picture, together with difficulty reporting on the data, created a disconnect when it came to helping franchisees continue to improve profitability and cash flow.

We worked closely with the franchisor to identify the key drivers of profitability by using actual franchisee results as the starting point. One very unique use of that data was to create an interactive, web-based dashboard model of profitability. Franchisees can easily see what improvement in a particular area means to their bottom line without ever entering a single number. A wonderfully received approach to involving and educating franchisees who are not financially oriented.

Franchisee financial statements are now imported electronically (no more faxes or manually entered data) and mapped into the franchisor common chart of accounts. Other non-financial and operational data is also imported electronically, combined with the financial data automatically, to create the key performance indicators and success metrics used for benchmarking, ranking, and comparing franchisees in the system.

With the new solution, support personnel and franchisees can easily create cash flow projections to answer the all important question every franchisee must be able to answer “What do I expect my cash balance to be over the next six months”? This new capability helps the franchisor and the franchisee see what lies ahead so opportunities or challenges can be addressed in advance rather than after it is too late.

Now they have a fast and easy way to put the focus on those key performance indicators that drive financial success in their system. Now they have the ultimate focus and accountability tool to continue their rapid growth and continue to educate and motivate their franchisees to higher and higher levels of financial success.

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A well established franchisor has in their franchise agreement and system standards to collect financial statements from every franchisee every month. These financial statements were coming in manually via fax and were in various different formats. That made it very difficult and time consuming for the home office and their support personnel to analyze the information and provide any feedback.

We were able to solve the problem by customizing a software tool for their business model. Each franchisee was able to export their data out of their accounting system and upload it electronically. The software maps the franchisee data to a standard chart of accounts and the results were instantly available to the home office and field support personnel. Now actual financial results and key performance indicators could be used to provide support and guidance for franchisees.
 
As a result, the home office and locations were able to accomplish the following: