- Many Franchisors are dealing with the tedious, difficult challenge of reconciling their franchisees’ financial statements.
- Financial planning and analysis can help but needs accurate data to work.
- metiRi®, a cloud-based financial solution, helped large global franchise systems identify saving opportunities of an average of $55,500 per location after providing financial clarity to franchisees.
If you’re one of the franchisors who is unable to reconcile your franchisees’ financial statements, first, know you are not alone. This is a challenge we at Revenue Management Solutions (RMS) often hear from brands. Sometimes it’s challenging for franchisees to provide data that aligns across locations. As a result, manual data reconciliation can be not only time-consuming but prone to apples-and-oranges inconsistencies.
But if you aren’t reconciling statements, do not fret. With the 2023 planning cycle upon us, there’s no better time to start than now — and you can set up your system for success as you move toward automated reconciliation.
Benefits of data-driven financial planning for QSRs
The benefits of data-gathering and analysis aren’t limited to planning. With reliable and accurate data, organizations can forecast, benchmark and even complete competitive analyses. The insights might also yield an unexpected path to new and missed revenue opportunities, not to mention a prudent shift in strategic direction that might have gone overlooked.
When you consider the cost of faulty data (which leads to faulty data analysis), the lost revenue can be staggering. In fact, a research study by DataRails and the University of Baltimore found that “dysfunctional” financial reporting processes are expected to cost US businesses a whopping $7.8 billion in 2022.
What’s the answer, then, for quick-service restaurants? According to Paul Compton, Director of Product Management at RMS, operators can try to manage financials manually, but as the QSR franchise industry is well aware, the incoming information can be all over the place.
“Some franchisors might be more analytical than others and pull together data, or at least try to; others have access to reporting tools and might provide operators with better information. Then there are business consultants who cannot provide any data because they don’t have access to the franchisee information,” he says.
This leaves operators with poor-quality information in multiple formats or none at all. And in the absence of a reliable, data-driven, single source of truth, it becomes nearly impossible to plan and drive business improvements effectively.
A better answer to how QSRs can manage a lack of data-driven financial planning and analysis (FPA) capabilities? Compton suggests operators take advantage of automation to start capturing data. “The time savings, ability to manage high volumes of data concurrently and have access to real-time insights that you can act on — it’s well worth it,” he explains.
The end of the manual financial close
While automated FPA will never replace humans, it can replace the time spent on tedious tasks with time for actions that directly impact your bottom line.
An automated, cloud-based financial solution like metiRi gives operators critical, real-time visibility into key financial drivers, whether taking a 30,000-foot view or examining specific, unit-level performance. metiRi was designed by franchise experts for use by franchised brands and their franchisees. The powerful technology has helped large global franchise systems identify saving opportunities of $55,500 per location by providing financial clarity to franchisees and enabling them to benchmark their financials across the system.
metiRi is system-agnostic aggregating unit-level financials from any system or source (i.e., spreadsheets and disparate accounting programs). When it’s time to share data, franchisees don’t need to change anything on their end — they simply upload their files in whatever format they always use.
metiRi then aggregates, standardizes and analyzes the data, displaying it in an interactive and straightforward dashboard. All lines of the business, including franchise operators and franchisees, can monitor a range of KPIs, such as sales and traffic, and costs, such as food and labor.
As metiRi returns standardized data, operators and franchisees can reliably and easily benchmark against similar restaurants based on specifics like geographic regions, market areas, size and other detailed attributes such as drive-thru/no drive-thru, suburban/urban or free-standing vs. inline.
The thorough analysis drives faster, more informed financial decisions for all users. Operators will especially appreciate the accurate cost picture that can allow them to identify potential changes and create critical cash-flow projections. Users can explore performance down to the unit level, conduct detailed benchmarking, track trends within a system and assess performance risk. Franchisees can evaluate their performance against the system and comparable peers with the assurance that all data is standardized and timely.
And again, since metiRi was designed by restaurant franchise experts, the dashboards highlight the unique information that franchise brands and franchisees need (P&L, capital spend, above-store costs, etc.). metiRi creates one source of truth — for everyone. When that happens, open conversations become possible. When brands better understand franchisees’ challenges, they can anticipate concerns and work together toward success. In these challenging times, open lines of communication are critical to making quick decisions, analyzing short-term performance and optimizing long-term strategies.
Where competitors may offer only data and dashboards, metiRi clients benefit from RMS’s dedicated account teams of restaurant data experts. We believe this is why some of the world’s largest and most-respected restaurant brands, including one of the world’s top QSR brands, one of the largest coffee and baked goods chains and an international pizza leader, use metiRi as their financial insights solution. Multi-unit operators and clients monitor unit-level financials in 35+ countries, 15 languages and 27 currencies to make informed business decisions, and they have identified saving opportunities of an average of $55,500 per location as a result.