What KPIs Should Franchisors Track? A Guide With Practical Tips and Insights

Key performance indicators (KPIs) are vital tools for franchisors aiming to measure, manage and improve the performance of a given franchise system. But with advances in technology, there are more metrics available than ever before. This begs a very important question: What KPIs should franchisors track?

Why Tracking KPIs Matters

For franchisors, KPIs are more than numbers on a dashboard. They provide a clear picture of financial health, operational efficiency and systemwide customer satisfaction. But it helps to track the right metrics. Doing so empowers franchisors to identify underperforming units, reward high performers and make decisions driven by data that improve overall system consistency.

“For all the different brands out there, you want to track your revenue, obviously,” said Bob Moore, president of United Water Restoration Group. “But in different franchise models, there’s one or two levers you can pull.”

Key Metrics Franchisors Should Monitor

While each franchise system is sure to carry unique considerations, Moore identifies a few universal metrics that are essential for any franchisor. So, what KPIs should franchisors track?

• Revenue and Key Operational Costs: While revenue is the lifeblood of any franchise, controlling expenses is equally critical. Moore draws from his experience as a Domino’s Pizza franchisee to highlight the gears with the greatest impact. “In any food business, food and labor are your two biggest costs. They’re controllable and you have to manage them,” said Moore. “If you do that well, then you’ve got a really good shot at everything else falling in line.”
• Customer Satisfaction Indicators: Customer perception directly affects both future growth and brand reputation. Franchisors can track average ratings, review volume and trends to monitor customer satisfaction and identify areas for improvement. “I think the biggest one is the five-star Google review. So many people look at that,” Moore said. “I pay a lot of attention to how many reviews they have and what the reviews themselves say.”
• Franchisee Performance and Engagement: KPIs are not only about finances or customers. They’re also critical when it comes to assessing franchisee engagement and success. Franchisors should monitor metrics such as sales growth per unit, adherence to operational standards and employee turnover. Regular conversations and structured performance reviews can reveal issues that raw numbers simply may not.
• Operational Dashboards and Support Metrics: Dashboards can help both the franchisor and franchisee stay aligned on expectations and goals. “We have a weekly dashboard that we publish that we keep a close eye on,” Moore said. “Our franchise business coaches also have monthly one-on-one connects with our franchisees where they dig a little deeper into each of those. For the weekly one, we tell our franchises, ‘Put together good KPIs.’”
• Benchmarking and Trend Analysis: Over time, proper tracking of KPIs allows a franchisor to identify trends, anticipate challenges and make adjustments proactively. Benchmarking top-performing units against others can also help pinpoint best practices and operational gaps. And that can deliver a roadmap for system improvement.

Practical Takeaways

• Prioritize Metrics With Impact: Focusing on revenue, controllable costs and customer satisfaction will impact overall performance.
• Manage Dashboards: Weekly or monthly reporting that’s standardized can help maintain visibility and accountability among franchisees (regardless of owner or market).
• Engage Local Franchise Owners: Individual coaching sessions should take place on a regular basis. They can help deliver deeper insights and lead to more targeted support.
• Monitor Customer Feedback: In the social media era, online reviews are a key way of revealing systemic issues while spotlighting improvement opportunities.
• Benchmark Success: Comparing units can help identify both best practices and areas for improvement.

So, what KPIs should franchisors track? It’s important to start with the metrics that matter most. That generally encompasses areas like profitability, operations and customer experience. But by utilizing strong tracking systems, monitoring KPIs and delivering franchisees actionable insights, a franchisor can drive consistency and growth while delivering future success.

“Good KPIs provide clarity for both franchisor and franchisee,” Moore said. “They allow you to see where support is needed, ensure standards are maintained and keep the business moving in the right direction.”

Tracking the right KPIs isn’t optional. At the end of the day, it’s an essential practice for franchisors hoping to build a strong, thriving franchise system.

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