How well can you read a financial report and then translate it into a practical strategy to drive franchisee profits?
Number crunching can be a challenge but it’s important for any business owner or business development manager to understand how financial management can have an impact on profit and growth.
Franchise support teams need to be able to identify signs of financial distress and create profit-building action plans for franchisees.
US-based Rod Bristol of Profit Mastery has said “In order to improve profits and cash flow in a business, you have to first improve the owner, by improving their financial acumen. There is no other way.”
Consider whether your franchisees are competent at cash flow analysis and whether they can easily calculate and understand their breakeven points.
Do they know how to decode key performance and trend ratios?
Can they balance the three small business roles: director, shareholder and manager?
There are significant benefits for a franchise network where franchisees displayed superior knowledge and practical applications of essential financial tools and processes such as management reporting, benchmarking and best practice measurements, analysing a balance sheet and identifying the drivers of business improvement.
Professor Lorelle Frazer, director of the Asia-Pacific Centre for Franchising Excellence, believes a profitable franchisee is a happy and financially sustainable franchisee.
And the equation extends to franchisors, she suggests.
“A network of profitable franchisees creates happy franchisors with dependable royalty streams and less-stressed franchise management professionals.”
Frazer suggests, to that end, practical and continual engagement with franchisees on their financial data and trends will ensure franchisees’ optimum performance, profitability and sustainability.
Griffith University’s Asia-Pacific Centre for Franchising Excellence is hosting a two-day practical workshop designed to demystify the complexity of working with numbers in franchise businesses.
An extended four-day course will also take place in October.