Article
3 ways to enhance franchise performance with distributed analytics
Restaurant chains should learn how to better leverage their data to improve efficiencies and increase the revenue impact from each franchise.
May 10, 2016
By Jeff Morris, VP, Data Monetization Strategy & Success at GoodData
Large restaurant franchises are struggling to remain competitive and financially stable with limited access into customer preferences and individual franchise performance. On top of this, there is a constantly changing labor pool, and many organizations have difficulty hiring and retaining high-performing employees. The National Restaurant Association projects that in 2016, the restaurant industry will post sales of $783 billion dollars and employ 14.4 million people in more than 1 million locations. The statistics speak for themselves in illustrating that competition in the restaurant industry is higher than ever before and one question that remains is: How can restaurant franchises and brands manage their businesses to deliver superior customer experiences that help to ensure they don't get left behind?
One way to address the restaurant franchise performance issue is with a distributed analytics strategy. Distributed analytics, or the ability to spread insights across different types of users with different types of needs in different locations, is the key to keeping franchisees aligned with the parent company's mission and measuring efficiently against corporate goals. If the individual franchise is performing well and employees understand what personal success looks like and how to achieve it, then retention rates will increase.
Restaurant chains should learn how to better leverage their data to improve efficiencies and increase the revenue impact from each franchise. In order to do so, organizations must first determine what available data might offer insights, especially when combined with complementary information from a different source or two. Oftentimes, just contemplating the idea of consolidating data silos is a showstopper, especially in light of the investment that has been made in POS systems, mobile ordering, loyalty apps, social media, review sites, health and compliance, market demographics and weather, etc. Corporate brands can miss the opportunity to innovate and enhance their franchise models and customer experiences simply because they are overwhelmed with data.
Little do they realize how simple it is to ease into the process of transforming store managers into active business analytists. Using distributed analytics to perform the following will enable restaurant franchisees to see serious business growth and sustainability.
1. Increase employee retention rates
In a crowded market, competition for new restaurant managers and franchise operators is at an all-time high. In order to accentuate your restaurant brand, you need to create a solid, differentiated business model that gives location managers the direction and confidence they need to maximize their operational success and personal performance. Creating a standardized set of analytics specific to their local needs, that outlines the KPIs and benchmarks that plot their success will give the prospective franchise manager the confidence they seek in choosing a brand parent. With a step-by-step data roadmap and access to specific and actionable analytics, franchisees will be far more equipped to run a high-performing business. Higher sales per unit make the corporate franchise model much more appealing to current and prospective managers, and keeps restaurant parent owners happy.
2. Differentiate franchise business model
Potential franchise operators have a wide range of brands in which they could invest. By providing each manager with a business model and access to baseline analytics that have been tested and proven, your brand can clearly differentiate the value of your franchise and demonstrate the expected return. The positive results will drive regional expansion, a clear path to success and visibility into the performance needs of other locations to create cooperation among franchise managers so everyone improves their local operations.
3. Improve supplier relations and profitability
Restaurant suppliers always need to optimize their supply chains in order to improve their margins. By sharing, for example, franchise-wide customer experience and supply chain data with every supplier, they can more effectively manage their regional operations and reduce their costs, which give restaurant brands more negotiating power while giving partners broader margins. The overall business will gain from reduced supplier costs and there will be granular visibility into the forecasted demand.
Distributed analytics enhance restaurant franchise performance and provide actionable insights from the executives down to individual franchise branch managers and their staff. Aligning efforts and measurement goals allows for realistic expectations, improved predictability and lower employee turnover ratios. The real value comes into play when actionable information lands the hands of the managers and employees, and it visibly improves the customer experience, which is motivational for everyone.
