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Understanding the nuances between setting targets and accurate forecasting can make or break your brand’s success. Setting realistic targets and mastering accurate forecasting are not just optional skills; they are critical components of any successful franchise recruitment strategy. By distinguishing and implementing both, you can revolutionize your recruitment efforts and secure your brand’s future.
Targets are your ambition made clear, a declaration of your recruitment aspirations. Forecasts are your reality check, grounded in data and trends. They offer a prediction of future results based on current and historical data. They are not just numbers but a narrative of what your brand can realistically accomplish in the given time frame.
Targeting and forecasting are like heading to a destination and watching your speedometer and Google Maps. The time you want to arrive is your target. The time you’ll actually arrive, provided by Google, is the forecast.
Many franchises fail to distinguish between targets and forecasts, leading to misaligned strategies and disappointing outcomes. From various industry reports, hundreds of assessments we’ve conducted, and experience, only about 10% of franchise companies will achieve their recruitment goals this year. That means nine out of 10 brands will miss their signing and revenue goals for franchise development. In other words, two brands will line up at the bottom of Mount Kilimanjaro but only one will reach the summit.
Failing to differentiate between targets and forecasts can have severe repercussions. Brands risk disappointing stakeholders, wasting resources, and getting stuck in the relentless cycle of ineffective recruitment strategies. I call it the merry-go-round of frustration and missed opportunities. A brand begins the year excited to hit aggressive targets. The mantra is, “This year will be different!” But by the end of Q2, most are way off the mark, and nobody really knows why. And then they start to treat symptoms vs. root causes. Or worse, they start looking for the proverbial silver bullet that will turn everything around.
Conversely, consistently hitting goals and targets can create energy for your culture, driving excitement. Strong development rejuvenates your brand and makes a significant impact on recruitment, setting a solid pace for the next three to five years of royalty and EBITDA growth.
To break free from a disappointing merry-go-round, set manageable targets and use forecasting to diagnose your strategy’s efficacy.
Targets are aspirational yet achievable goals that your franchise aims to hit within a specific time frame. They provide direction and motivation. For example, setting a target of recruiting 20 new franchisees in a year gives your team a clear objective to work towards.
Forecasting, in contrast, is a strategic process that involves analyzing your data, market trends, and other relevant factors to predict future outcomes. Forecasts are grounded in reality and offer a data-driven estimate of what is likely to happen. If your target is to sign 20 new franchisees over the next 12 months and a reliable, proven data forecast is predicting 15, you can adjust. But if you don’t have the forecast tools and lack the understanding of how to read a forecast to conduct root-cause analysis on the gaps and voids, you are driving in the blind. You’re likely going to join the 90% who don’t achieve annual recruitment targets.
Here’s how you can start to align your targets and forecasts more closely with reality:
As we approach the end of Q3, it’s the perfect time for reflection and forward planning. How close are you to your targets? Are your forecasts proving accurate?
Ask the harder questions: Are your goals realistic? How are you setting your targets, and are they based on solid data? Can you forecast the next 90 days with confidence? If you know you need more step ones or applications, you can focus on training and coaching to improve those areas. You’re not looking for a silver bullet; you’re watching and managing your numbers.
These questions aren’t just about accountability; they’re about laying the groundwork for future success. Knowing where you’re heading is just as important as understanding how you’ll get there.
Let’s go to work!
Art Coley is CEO of CGI Franchise. Using the proven Recruitment Operating System (ROS), Art and the ROS Support Team help franchise companies implement and execute a predictable, repeatable, and sustainable franchisee recruitment program. The company is based in Temple, Texas, and works with brands worldwide. Contact Art at acoley@cgifranchise.com or 281-658-9409.