“How Do You As A Franchisee Stack Up? ”		«BACK
	by Dennis L. Monroe
	from January 2006 Franchise Times

The franchise world is full of comparisons.  We talk about “store comps” (which means the comparison of store sales from the previous year); we also talk about customer counts.  There are many different ways that we evaluate franchise businesses.  Many of these approaches are rather narrow and do revolve around sales and sales growth.  I suggest every franchise system have a broader based evaluation system; not just on an operating basis but on an overall approach to the business.

Let’s look at a possible way to evaluate a franchisee business.  The evaluation could be done on a store-by-store or aggregate basis.  This article presents some key considerations to determine how you, as a franchisee, stack up in the franchise world.

There are two basic ways you can be evaluated as a franchisee business:  (1) How do you stack up in your franchise system as a whole and (2) even if you stack up favorably in your system, have you met what we would consider to be reasonable performance standards for the franchise industry? 

Take time to score yourself using the following matrix.  Also, while the scoring system seems arbitrary, it was meant to weight different factors and take into account superior performance and penalize for situations that may quickly result in failure.

FRANCHISEE MATRIX

Obviously, the above matrix is very subjective but the point is, every franchise business can develop a rating system, not just based on operational scores but based on true performance, balance sheet and cash flow.  Some measures are absolute, some are relative and the matrix will change with time.  Consider these approaches and develop your own matrix and thus create a true objective measure.

Next month’s column will feature the franchisor’s matrix.