January 29, 2015 at 4:33 pm #365Marican IncorporatedKeymaster
Sharing franchise financials – to share, or not to share is the question
One of the questions asked at the Franchise Growth Master Class last week was, ‘how much financial information should you disclose to your team?’
The response from facilitators Michael Sherlock and Alan Anderson was that transparency is really important, whether it’s within a head office team, with your franchisees or even with your franchisees’ staff.
The analogy of, ‘how can you guide a ship if you can’t see where you’re going?’ was given to illustrate the point.
However, it was noted that it is common, particularly for small business operators (including new and emerging franchisors) to want to keep their financial information guarded.
Yet, back to the boat analogy, this does make it hard to steer the business.
Displaying franchise financials without giving too much away
A great tip from Alan to get around this is to display the information in percentages if you can’t bear the thought of revealing the actual figures.
Whether it’s benchmarking the difference in performance between franchisees, or showing levels of franchisor growth, percentages are a good way to give insights into business performance without revealing the actual numbers.
Although the more information you do give, the clearer the picture, both in terms of current business performance and future business goals.
Having actual figures will make the data more meaningful to franchisees, and their staff, and they will be better able to gauge their performance compared to the rest of the team, and the rest of the franchise business.
A lot of the larger franchises release franchise financials to both franchisees and their staff as they are aware of the value and lift in performance this can bring.
At the end of the day you’re effectively all on the same team so it is something to consider.
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