Analytics
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B2B
How a franchisor can see that his franchise is selling
Businesses reach a point of decision-making for growth. Franchising is a reliable tool for scaling and expanding networks effectively.
Businesses reach a point of decision-making for growth. Franchising is a reliable tool for scaling and expanding networks effectively.
Any business comes to the point of “what to do next”. This is the point of organic growth and further only more — scaling and developing the network. One of the easiest and most reliable tools for scaling a business is franchising. But franchising is not equal to the global network in 5 minutes. This is a business, and therefore a large work, which contains the standardization of all processes, the legal aspect, the franchise package, the marketing strategy, the presentation materials.
Franchise is an important stage and the most expensive business product. It is an opportunity to scale anywhere in the world, declare your business successful and build a global network. And first of all, the success of this network and franchise depends on sales.
For the franchisor, the franchise will help to increase market shares with min. costs, obtain additional income through periodic payments, strengthen and promote TM, free themselves from the need for operational management, study the market based on the franchisee's experience, reduce financial risks and enter international markets. But it works on the condition that the franchise sells.
There are a number of factors that affect the success of sales in a franchise — “levels of franchisability”. Among them, unique technology/equipment, format, product, standardization capability, sufficient margin, anti-crisis format, etc.
In fact, franchisability levels are litmus papers for determining business success and results. For example, you can estimate how easily a business localizes from 0 to 10. 10 is the highest score, you can easily localize wherever you want (your concept, business model and format allows you to do this). If 7-8, then it means that something interferes (perhaps competition). If you rate this score at 5 or less, it means that it is a challenge for your business to work on.
Recipe Franchise Groupfor a successful franchise that sells consists of important “ingredients”. And no ingredient can be removed, or neglected.
Evaluation of the success of the idea + analysis of the format of the franchise point + standardization of processes + protection of the business + determination of the points of attachment of the franchisee to the network + formation of the support team + advertising = successful franchise.
How to evaluate the success of an idea? Open the catalog of franchises, choose your category (for example coffee houses) and look at the following indicators: entry fee, amount of investment included, monthly royalty included in the amount of support, analyze the key resource of this franchise (what royalties are paid for and consider what may be in you), how many years the company is on the market, the number of own and franchise points, geography of development.
Next is the format. This is a quadrature, an assortment matrix and people. What is it for? If you want to become a national leader, and the investment in the project is 200-300 thousand dollars, then it is unlikely that it will be possible to occupy the market of the whole country. Formats are needed for this.
Here you can return to the question: “What is my business so unique that only I have”? You need to understand your key resource for selling a franchise. Rather, her life. Franchisees pay royalties when there is something to pay for.
The second question is, “Why do you need a franchise?” Build a brand, open 100 restaurants, attract investment for your own production, sell a company, load production or reach a specific amount of turnover. You need to determine where your company will be in 5 years and how franchising will help you in this. Then you will have a clear goal that you can move towards together with the team.
We opened a franchise — and what about it? What does the franchisor earn on?
The entry fee is the price of the franchise, which is never refunded. Royalties are periodic payments. It can be fixed or a percentage of turnover. Marketing payment is made for advertising campaigns of national importance or marketing.
The financial model is a universal indicator for understanding how successful a franchise is in sales. Financial indicators that are set by the franchisor: turnover, number of customers, number of checks and depth of checks, load. Successful implementation of financial indicators is an excess of momentum and a payback period that corresponds to the model or overexecution of the plan.
A successful franchise is when the franchisee comes for the second or third object, because this is where the perfect match occurred: sales + engagement + loyalty.
Franchising is not a new story, but it is still specific to the understanding of Ukrainian entrepreneurs. “Blind zones” for franchisors can affect profits and the success of sales at the facility.
Let's move to a parallel universe, where in Tiktok there is only talk about the new restaurant “Ranok” in Kiev. It offers its users exclusively 24/7 breakfasts, but they are unbeatable. The owner of the restaurant, Mr. Andriy, decided to scale up his success and created a franchise. Within a week, the first franchisees appeared in Lviv, Odessa, Kharkiv and Frankivsk.
Now it is not enough for Mr. Andriy to be in his own restaurant from morning to night to understand the state of affairs in business. He dreams of a dashboard where there will be green (all good) and red (all bad) flashlights that will help the franchisee quickly make successful management decisions.
The first thing we need to implement our dashboard is a single database of the results of each establishment. That is, when creating a franchise, Mr. Andriy has:
An example is the Ukrainian product. Records. The choice of CRM is individual and since it affects the entire franchise, it is worthwhile to involve specialists for the selection. But in short, here is a list of what exactly you should pay attention to:
Do not underestimate the human imagination - even if there are only three buttons, you can approach the matter creatively and press them in different ways. That is why it is important for a business to have the described rules for working with software, especially for a franchise. People enter the data into the system and the presence of rules will help to unify their format and ensure reliability.
The main task of the dashboard is to provide the franchisor with comprehensive information about the dynamics of its sales. To do this, we have to consider the impact of the key components of the sales process on the final result and it is they who will form the basis of our report - the sections in which we will compare the indicators.
Who sells. The first segment is those responsible for sales. Let's define 3 levels of detail — from the most generalized to the most detailed:
This section creates a focus on certain responsible persons in the event of positive or negative deviations and allows you to scale or level them accordingly.
In this way, we get rid of the effect of collective responsibility for the result, increasing the importance of the efforts of each participant in the process -- now we analyze the impact of each on the success of the franchise.
What sells. Restaurant “Morning” has a main assortment - main dishes, seasonal dishes, desserts, drinks, and related products - certificates and merch. The product section will allow us to analyze demand and adjust the supply of the entire network accordingly. Let's define here 2 levels of detail:
Filters. The specified criteria can serve not only as sections, but also as filters applied to the entire report. Other important ones are also term (it is desirable to have a free range selection - from 1 specified day to several years) and Marketing Tools Involved (to identify the results that resulted from the actions carried out, the implemented loyalty programs, etc.).
The functionality of free data structure and their dynamic filtering is rarely available in CRM. Instead, the latter allow users to freely retrieve data into separate BI solutions - applications created exclusively for analytics. Unconditional leaders of today - The Looker from Google and Power BI from Microsoft.
Having defined the structure of the analysis, we have the first sketches of the layouts of our future reports:
Finally, we are ready to fill the report with data. The last step is to determine directly the indicators of sales dynamics, which we will analyze. We will define the basic indicators that we need both in terms of sellers and in terms of products, as well as a number of unique indicators of each report.
Here is an example to explain the difference between the first and second indicators. On Saturday, a family visited a restaurant in Kiev, who ordered two European breakfasts, one children's, two coffees and juice. The first indicator will take away 6 products sold, and the second - 1 sale, because all products were sold within 1 order.
This distribution is important to identify the average volume of orders, as well as a more reliable comparison of the number of sales between points of sale. So, for example, several family holidays held in an institution can significantly affect the first indicator, but the second will balance the understanding of the current average number of customers.
These indicators help determine the measuring impact of the franchisee on the overall result.
Due to the presence of dynamic filters by regions, points of sale and sellers, we have the opportunity to analyze these indicators not only in a generalized way, but also in a localized way. In this way, it is possible to track the excellent demand for individual products in different regions and implement unique local offers.
As a consequence, we have reports of the following structure:
Modern BI tools provide end-to-end interconnection of all widgets on the report page. So, by clicking on one indicator or/ and applying filters, all values of tables and charts will display data that is relevant to the active indicator.
Due to this, the user does not need a large number of variations of data display - 1-2 dynamic widgets are enough.
The reports we have built contain all the key indicators, and therefore we will use additional visualization widgets not to duplicate them, but to visualize their dynamics in the period, information about which is not currently displayed.
The indicators, the dynamics of which are tracked, depend on the actual goals of the business - to increase the share of sales of a particular product or the average check, etc. Since these are the first dashboards of the “Morning” franchise, let's start with the base - reflect the dynamics of the amount and number of sales in terms of points of sale.
The second widget, which we will consider before implementation, will be a visualization linking the data of the first and second reports - we will display products, the number and amount of which was the highest, in terms of points of sale.
These widgets can also be separated on a separate page of the report for ease of display.
Building a layout is 80% of the task, so the most difficult thing with you is already behind us. If there is a layout, Mr. Andriy can contact integrators who will build him a report of the appropriate structure in CRM or BI solution within 2-3 weeks.
What's next?We usually recommend setting aside time for analysis weekly and monthly. The control “stop” every month is a fairly standard and synchronized reporting period with all market players. Weekly analysis allows, in turn, to further work with the planning of results and in time to apply the necessary measures to achieve the planned results at the end of the month.
The built dashboard will allow you to scale management decisions for the entire franchise more objectively due to the depth of understanding of the impact of each factor on the result, strengthen the positive dynamics and stop the negative in the early stages.
Of course, this is a big one, but it's our first step towards automated analytics. The following are the customization and further deepening of indicators, the automation of determining their mutual influence, the involvement of AI to form recommendations to the manager and team, and systematic sales planning.
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