Franchisee Benchmarks Franchisors Should Track

Franchisees should be able to show positive sales growth, but they should also be able to meet franchisor expectations in other areas. That includes keeping up with operational consistency, delivering a great customer experience and following the systems the brand has in place. These benchmarks help franchisors measure how successful a franchisee is likely to be.

“For us, the earliest indicators are about operational consistency, culture and community formation,” said Andy Stenzler, co-founder of The Pack, a fitness studio franchise. “We look closely at things like member engagement, repeat visitation, trainer quality, local brand presence and how quickly a franchisee becomes embedded in their market.”

No matter what type of franchise you’re operating, strong franchisees are the ones who build strong relationships with the people they serve. Customers tend to return to a business when it feels reliable and returning customers can help franchisees meet benchmarks like customer retention, recurring revenue, positive reviews and year-over-year growth.

“We also look at execution around staffing, cleanliness, programming consistency, local marketing and overall member experience,” Stenzler said. “Long-term success tends to come from operators who focus relentlessly on execution and culture rather than just short-term growth metrics.”

During the first year of business, it’s important that franchisees start off on the right track for success. In addition to revenue growth, franchisors should look at the systems and habits franchisees are building in the early stages, like staffing consistency, customer service standards, local marketing, operational discipline and employee retention.

“The first year is really about building habits, community, operational discipline and brand trust within the local market,” Stenzler said. “We encourage franchisees to focus heavily on creating an exceptional member experience, building a strong trainer and management culture, local community engagement, consistency of programming and operations, and establishing recurring membership behavior.”

Another benchmark to look at is how involved an operator is in their local community. Local recognition and word-of-mouth are important in bringing in customers.

In order for franchisees to meet the benchmarks a franchisor is setting, the franchisor must be providing the necessary support. That means ongoing coaching and having an open line of communication for questions that come up.

“We view franchising as a long-term partnership, not simply a licensing relationship,” Stenzler said. “Our goal is to provide franchisees with support across site selection, studio design, operations, programming, training, marketing, technology, launch strategy and ongoing business development.”

Franchisors should keep an eye on:

• Consistent operations, including staffing, cleanliness and customer service standards.

• Strong customer retention and repeat business driven by a reliable experience.

• Local market engagement through community involvement, marketing and brand presence.

The franchisees who stay consistent with operations and customer service are the ones who see the strongest long-term results.