MYP Corporation outlines the benefits of a sound performance system for franchise groups

Accountability and discipline is key to the success of a franchise group, and the most effective way to ensure both is by establishing a sound performance system according to MYP Corporation .

The business development specialists note that there is typically a very significant gap between the best performing franchisees in a franchise group and the poorest performers.

Underperformers consume the bulk of a franchisor’s time and resources, and can undermine the business reputation of a franchise brand, pursue legal action against a franchisor and impact negatively on the ability of the franchise to attract new franchisees.

In these circumstances, MYP Corporation states, a culture of discipline, accountability and performance is lacking. While selecting reliable franchisee owners is a key element in building a sound business model, the structure of the franchise system itself is just as critical.

What is needed is a sound performance system. MYP business advisors define a performance system as “a process and structure that enables the efficient, timely and accurate capture of information on the drivers of business performance and how these drivers have impacted on the achievement of financial and non-financial objectives.”

Such a system must be able to measure and integrate activity based, non-financial and financial information, and to present the information in context.

In addition, a performance system must allow all this to be done quickly and with minimal disruption to the day-today operations of the franchisee.

It is critical that this system is treated as a non-negotiable aspect of the franchise model, one in which all franchisees actively participate.

Business advisors at MYP Corporation specialise in providing performance systems and structure to franchise and other business groups.

With a relatively low cost for franchise members, these services can deliver a range of benefits for franchisors, including:

• an increased focus by the franchisee on the critical drivers of business performance
• the capability for franchisors to assess how their franchisee performance compares with other franchise groups
• increased positive competition between franchisees to perform
• improved information for the franchisor to assist in the management of franchisees, particularly the underperforming business; and
• the opportunity for the franchisor to intervene more effectively (and more proactively) with underperforming franchisees and mitigate the risk of legal action, reputational damage or franchisee unrest.