Why Standardization Matters

At BKE we are constantly focused on ways to make franchisors and franchisees more productive and successful. One of the biggest issues we have seen over the years is varying methods and metrics in franchisee bookkeeping. 

 We kept hearing the same pain points from all of our franchisor partners, “Our franchisees’ financial statements are all over the map.” This seems to always fall back to how they account and categorize for the same types of business transactions, therefore making the process of comparing financials impossible and coaching from the data unobtainable.  

 When everyone does their own bookkeeping independently, it is almost impossible to get quick results on how your business is performing compared to others and which areas require decisions for improvement. Standardized bookkeeping allows for  “apples to apples” comparison of financials so you can create data driven action items.  

 Through standardization the franchisee can:

  1. Get averages by account so they understand where they are in comparison to others so decisions can be made whether they are over or underperforming per category

  2. Get averages by time in business — again, “apples to apples” matters in starting up a business or in business for over a year. The costs will be different

  3. Accurately correlate  items like marketing spend to revenues or payroll to revenues to be able to see what variables matter 

The franchisor also gets a leg up with standardization including: 

  1. An increase in coaches to franchisees due to not chasing and always having the data 

  2. The franchise coaches spending more quality time forecasting and creating to do actions versus analyzing forever “what is in this category” for each franchisee

  3. Getting totals by categories across the franchisees so they know where to focus on cutting costs 

  4. Really understanding cogs and g&a percentages of revenues across the system 

  5. Finally getting a feel for payroll and where it is being spent 

  6. Having item 19 data all year long ready to go 

But the biggest item of all includes more successful franchisees which mean a more successful franchise and ties to franchise royalties and more franchise sales, because consistent evaluation fosters consistent results. 

 At BKE we have designed our system of people and technology, BKE insight, first and foremost to deliver timely and accurate books for the franchisees. As part of our service for franchisees and franchisors, we have added into BKE Insight the ability to standardize the chart of accounts and also summarize the results for the franchisor.   

If you are interested to learn how BKE helps our franchise partners focus on growth rather than fixing mistakes, please schedule a time here