Two Calculations Franchise Development Teams Must Make At Quarterly Planning Meetings 
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Two Calculations Franchise Development Teams Must Make At Quarterly Planning Meetings 

Two Calculations Franchise Development Teams Must Make At Quarterly Planning Meetings 

Quarterly meetings are critical to successful franchise growth. They are often the only time the organization can get everyone together in one place.

One mistake we notice franchise development teams making during quarterly meetings is, they’re not data-driven in their decision-making.

FranchiseHelp’s diverse client base spans numerous industries, and one piece of business wisdom we’ve gleaned is, franchisors need to forecast sales and visualize metrics to track goals accurately. They must set expectations for digital marketing results with practical and thoughtful planning.

We built a unique growth marketing tool to help you do just that. It’s called FranCalc, and it’s a free online calculator where you can plug in your brand's financials and other relevant metrics to visually calculate the sales and marketing most appropriate for growth.

When your leadership team gets together for your quarterly meeting to figure out your lead budget and investment opportunities, try these:

Calculation #1: Franchise Unit Value

Figuring out how much one new franchise unit is worth is a complex equation. The old way of focusing on initial franchise fees makes selling a unit seem like a smash and grab goal. Franchise salespeople need numbers on the board, but executives are thinking bigger and longer term. The here and now value is important, yes, but what about five years from now?

The Franchise Unit Value Calculator helps you easily understand your full expected new deal value over the average deal term including royalty collections and other metrics. To calculate this data driven, long-term-thinking number, start with average values for your franchise, assuming a standard single unit.

Most inputs can be found in your FDD (Items 5, 6, 17, and 19). In cases where certain fees vary within your system, you’ll want to pick one average case as an example to use throughout, since this is a predictive model for an average unit.

If you have multiple types of franchise units for your brand (e.g. conversion vs. new, or kiosk vs. restaurant), you may wish to run the calculation two or three times, to determine the average values for those common cases. Try FranCalc’s Franchise Unit Value Calculator to do so.

Calculation #2: Lead To Deal

How many leads do you need and how much does it cost to sell one franchise unit? Estimation isn’t enough, and depending on your brand's details versus the industry average, your ROI will vary. But with the right data and tools, your franchise can forecast how many deals you can realistically expect to close from online leads, as well as project ROI.

Online lead generation is a numbers game, but it can also be one of the most cost-effective sources out there. Understanding the cost/value of your lead generation efforts can help re-energize your sales team and drive towards even more deals for your brand! If you want to forecast how many deals you can (realistically!) expect to close from online leads, try FranCalc’s Lead to Deal Calculator.

Ultimately, successful franchise growth requires data-driven in their decision-making. 

Leverage these tools at your next quarterly meeting!


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Published: July 20th, 2021

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