How Do I Benchmark Franchise Performance? Tips for Franchisors

Benchmarking gives franchisors a structured way to evaluate how individual locations are performing within the broader system. It creates a consistent framework for identifying strengths, uncovering inefficiencies and guiding operational improvements. Without it, growth can become uneven and difficult to manage across multiple markets.

“When we talk about benchmarking, we try to keep it simple and actionable,” said Brad Spencer, vice president of operations for Winmark. “The goal isn’t comparison for comparison’s sake. It’s helping franchisees understand what’s driving results.” 

Key Metrics to Track to Benchmark Franchise Performance

Strong franchise systems rely on consistent measurement to understand what is working and where adjustments are needed. Tracking the right data allows franchisors to move beyond intuition and make decisions based on real performance trends. At Winmark, there are two key areas of benchmarking: store performance KPIs and financial benchmarking.

“It starts with store-level performance and the day-to-day drivers of the business,” Spencer said. “Through our cloud-based business intelligence reporting platform, Winmark Connect, franchisees have access to KPIs like store traffic, average ticket, sales, category performance and inventory. Metrics are focused on things they can influence in real time.”

The franchisor then complements that with the financial benchmark, which allows franchise owners to assess overall profitability against the system, as well as against stores of similar size. This measures income and expenses at the line level.  

“The financial benchmark helps identify financial leaks in a business before they turn into a bigger issue,” Spencer said. “A 1% correction in an unnecessary expense has a meaningful impact on profitability. Ultimately, our franchisees’ financial statements are their report card, and we are focused on improving per-unit financial performance.”

Franchisors should prioritize a small set of metrics that directly connect to revenue, cost control and customer behavior rather than tracking everything available. Clear definitions and consistent reporting standards are essential so every location is measuring performance the same way. It is also important to review metrics regularly and tie them to operational decisions rather than treating them as static reports.

How to Compare Performance Across Different Locations

Comparing performance across locations requires more than looking at system averages. Differences in market conditions, store size and maturity can significantly impact results if not accounted for. A structured approach ensures comparisons are fair and useful for decision making.

“Our benchmarking for both financial performance and store-level KPIs is set up in a way that not only can you see system-level benchmarks, but you can break them down to geographic and volume ranges,” Spencer said. “It's important to benchmark against similar stores, not just a system. It also highlights who’s excelling in each metric so we can learn from them and share those insights across the system.”

Franchisors can establish peer groups so franchisees are being compared to locations with similar characteristics and operating conditions. It also helps to track trends over time rather than relying on single-period snapshots, which can be misleading. Sharing top performer strategies in a structured way ensures insights are applied consistently across the system.

How to Use Benchmarking Data to Support Franchisees

Benchmarking becomes most valuable when it leads to meaningful support and action at the unit level. It should guide conversations between franchisors and franchisees rather than exist as a standalone report. When used correctly, it helps prioritize where time and resources should be focused.

“Benchmarking at Winmark is a diagnostic tool, not a ranking exercise,” Spencer said. “It allows us to move from 'guessing' to 'knowing' where a franchisee should focus their energy. When the data identifies a performance gap, it triggers a collaborative action plan between the franchisee and our support team.”

Franchisors should use benchmarking to guide coaching conversations that are specific and tied to measurable outcomes. Action plans should include clear steps, timelines and accountability so improvements can be tracked over time. Ongoing follow-up ensures that changes are implemented and adjusted as needed based on results.

Turning Benchmarking Into Systemwide Growth

Benchmarking only works when it is consistently applied and clearly understood across the system. It requires discipline in how data is collected, shared and acted on at every level of the organization. When done right, it becomes a foundation for scalable and repeatable performance.

“If benchmarking doesn’t lead to clear actions, it’s not doing its job,” Spencer said. “The real value is helping franchisees focus on what actually moves the business forward.”

Want to learn more about how 1851 helps franchisors grow their franchises with confidence? Visit www.1851growthclub.com and see what we can do for you.