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Gerry’s Blog
11/10/2023
Using the Scorecard in Zee Coaching
Leading Indicators vs Lagging Indicators
Often, the conversations that FBC’s have with franchisees are mostly reactive based on reviewing historical data on the P&L that shows what did not happen in the previous accounting period. I refer to these numbers on the P&L as “lagging indicators”. These conversations are difficult and often strain the relationship between the FBC and franchisee, especially if the franchisee is struggling.
“If I wait to see it on the P&L, it is too late” – Reactive
I focus on using the Scorecard when coaching Zee’s. – Proactive
The scorecard focuses on the “leading indicators”. Leading indicators are based on measuring what I must do on a daily or weekly basis to have great numbers on my P&L. I should never be surprised to see what my P&L KPI results are. This is particularly important during the initial launch phase with the Zee’s. For example, if I need to produce a revenue number of $30,000 in a month, I can break that down as follows:
Scorecard Categories- Average Ticket
- Closing Ratio
- Appointments
- Leads
| Desired Revenue | $30,000 |
| Average Ticket | $1,900 |
| Number of Sales Needed | $30,000/1900 = 15.8 |
| Closing Ratio From Appt at 40% | |
| Number of Appt’s Needed | 15.8/.40 = 39.5 |
| Lead Conversion Ratio to Appt 20% | |
| Number of Leads Needed | 26.33/.20 = 197.5 |
We can then focus on the numbers above per day or week. You can then work with the Zee as needed to improve these numbers before the revenue number hits the P&L. It works great when we have the Zee understand the effect of these numbers and they consistently work on the right things to grow their business.
The Scorecard becomes a powerful tool for the FBC to maintain the Proactive conversations that the Zee will come to enjoy and look forward to. The FBC becomes the encourager and coach that they should be, not the sheriff that is just telling the zee what did not happen.
You break down the Cost of Goods and Expenses the same way. If you are interested in learning more about using the Scorecard and the other tools of FOS – Franchise Operating System, let me know.
Here to help!
1/31/2024
5 Stages of Franchisor Growth to Success
- Survive The first and most critical step in the Franchisor’s journey to success is survival. How to keep things going until they begin to award Franchisees and collect franchise fees. Often the franchisor is dependent on their company owned unit to help fund the franchisor entity. This presents the challenge of how to forward-invest in all the support necessary to launch franchisees to success in the business model. Success in this stage is to begin to have a blend of franchise fees and royalty flow to generate cash flow for supporting franchisee’s growth and pay the bills. The best-case scenario is being well capitalized to not be dependent on franchise fees to survive.
- Sustain Once you’ve managed to survive, the next step is to sustain. Franchisor sustainability is all about growing royalty self-sufficiency to support the operational budget of the franchisor. It involves establishing a solid foundation of franchisee support to scale franchisee growth. You have all the tools necessary to accommodate that franchisee growth. You have learned how to launch the franchisee to success within their first operational year. You can teach them what you do and how to make money doing it. You can sustain and grow Unit Level Performance. You have a successful FBC program in place. You have financial information from franchisees to coach and have success benchmarks. You begin to have the start of system benchmarking. You begin to get the results that will lead to a robust Item 19 in the next Scale stage. You are at or close to royalty self-sufficiency. You have an effective FAC to help guide you to, and through the next Scale stage.
- Scale After survival and sustainability comes scaling. Scaling is about expansion and growth for both the franchisor and franchisee. The franchisor can only scale by their success of leading and coaching the franchisees to success and scale . It’s about taking what works and doing more of it. Scaling your existing franchisees while continuing to add new franchisees. In this phase, you’ll leverage your resources to maximize your Franchise Development success. You’ll learn to support franchisees smarter, not harder, using systems, automation, and delegation to grow without everyone becoming overwhelmed or overworked. This is the stage where you truly start to see the fruit of your previous efforts. You are a system with happy, successful franchisees.
- Success The fourth stage is success. This is the stage where you reap the rewards of your hard work. Success is knowing that you are truly serving the franchisee and your team. All stakeholders are benefiting from your franchise system. Everyone is feeling fulfilled and content in their collective achievements. Success is a testament to your survival, sustainability, and scaling efforts and the culmination of all your hard work and perseverance.
- Steward The final stage, stewardship, is about responsibility and legacy. It’s about using your success to make a difference in the world. As a steward, you recognize that your success is not just for you but can be used to benefit others. You use your influence and resources to give back, to mentor others, and to make a positive impact. Stewardship is about leaving a legacy that outlives you, ensuring that your success continues to bear fruit long after you’re gone.
If you are looking for help in navigating this journey, schedule a free 30 minute consultation, and let’s talk!
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