To understand how franchises can use benchmarking software to grow their business and succeed, it is important to first back up a few steps and consider the potential benefits of using benchmarking in any business.
At its most basic level, benchmarking is the process of comparing a company’s performance and processes against a specific standard. For many companies, this is an industry standard or a set of best practices that have been identified by the industry itself.
All benchmarking is carried out through data analysis in one form or another. Importantly, the process of collecting the data must be clearly defined to ensure fair and accurate apples to apples comparisons.
Benchmarking Software Benefits to Franchises
When considering how franchises can use benchmarking software to succeed, start by thinking about a typical franchise with multiple franchisees. Some of those franchisees will be top producers while others struggle to show a profit.
By using the right benchmarking software, franchises are able to build their own benchmarks using more pertinent information than generic industry data. This allows the franchisees to see exactly where they stand in relation to other units in their system. It also gives the franchisor an opportunity to provide all of their under performing units the guidance they need to grow and succeed.
Improving Practices
Of course, the operative word here is “opportunity.” The right benchmarking software will give franchisors a framework for determining how the business practices of the high performers differ from their less successful counterparts. But, they still have to do something with that information.
A good way to start is to outline a series of steps for the lower performing franchisees to follow as they get their operations up to speed. Then, as they work their way through the steps, they will be able to chart their progress in real time against the benchmarks identified by the software.
The right software will also allow all interested parties within the company (administration, management, etc.) to keep an eye on how well the franchisees are tracking.
The other factor to consider with using software to set benchmarks across a franchise infrastructure is that it allows for a more effective allocation of resources.
Training, franchisee support and even mentorships can be created from the data making the entire system more efficient and effective. The use of software to track progress and set benchmarks also reduces the time spent by the management team in creating and monitoring performance, another cost saving feature of the technology.