Unlocking Restaurant Success with Financial Benchmarking

In a Bain & Company study (1993-2017), 80% of executives ranked benchmarking as one of the most desirable financial management tools. Yet less than half were satisfied with their ability to use their existing tools.

Why? Because it is extremely time-consuming.

The digital universe contains 40 times more bytes than there are stars in the observable universe. Every day, we generate an additional 2.5 quintillion bytes.

Managing a large amount of data, fragmented systems, inconsistent reporting and typical franchise system delays can be time-consuming. A great deal of effort is spent on just aggregating data.

On average, restaurant finance teams spend 80% of their time collecting financial information and only 20% analyzing it.

A New Approach to Financial Benchmarking

At Revenue Management Solutions, our goal is to revolutionize the way franchise restaurants approach financial management. And to do that, we created a financial reporting software that delivers actionable insights.

Today, our financial reporting software, metiRi®, is used by over 80,000 franchise locations worldwide. We’ve gathered key takeaways into how brands can efficiently benchmark restaurant performance across their system to support financial success.

To start, it’s essential to examine how, when and where operators access their financial data. When reviewing data, we recommend assessing the following factors:

Boost Profits with Powerful Financial Insights

Cut reporting time from months to hours with metiRi®. Designed for franchise brands, manage financial data system-wide and uncover average annual cost-saving opportunities of up to $55,500 per location.

Data Integrity

It’s important that benchmarking information is held to the same standard as financial reporting. Safeguards ensure all transactions are accurately reported. Financial teams should first ask themselves, “Do we have all the data required to assess performance accurately? Is any data duplicated?”

Accuracy

Within an extensive franchise system, the level of sophistication in reporting methods can vary widely. Some large franchisees may use cutting-edge restaurant technology, while others rely on manual entry, leading to potential inaccuracies. Additionally, reports may sometimes reflect biases, showing only favorable outcomes. It’s imperative that all collected data undergoes an equally rigorous validation process.

Cutoff

Franchisees often have their fiscal calendars, which might not align with brand standard, leading to different reporting period lengths. Teams should ensure that operators enter transactions for the correct accounting period.

Data Classification

Franchisees operate as independent businesses and classify accounts and financial statements to fit their needs. For example, while some view utilities as a controllable cost, others may not. These varying decisions make meaningful comparisons between entities challenging. Teams should evaluate their financial reporting standards and effectively communicated them across the entire system.

Time Factors

Slightly different than cutoffs, time factors can also undermine data quality. For example, franchisees may report financials on different frequencies — for example, some monthly and others quarterly. Franchises may also report using different lags (e.g., 45 days after a period ends vs. 30). Teams should assess how they standardize and validate collected data.

Comparing Entities

Benchmarking involves comparing similar data, which requires careful identification of relevant peer groups. Finance teams can compare attributes such as geographic regions, market areas, and size (capacity or sales). They should evaluate which comparisons are valuable to the overall franchise and its operator. By incorporating those details, they can ensure consistent financial reporting.

Reveal Financial Insights by Overcoming Data Aggregation Challenges

The bottom line: If your financial data collection is wrong, so are any financial results you may draw from it.

We have developed a set of best practices to support our franchise system clients.

Benchmark Your Franchise Brand With Confidence

At RMS, we understand the challenges you may face managing multiple franchisees. Dealing with varied data collection methods and accuracy levels can make it difficult to assess your business’ financial health.

Our franchise software is built on real-life scenarios and best practices. metiRi delivers cutting-edge financial data analytics tailored to meet franchisees’ needs. With its interactive financial dashboard and financial data analysis, benchmarking your system becomes effortless.

metiRi unlocks the truth in your data, helping you distill it into growth-supporting financial insights you can use. To benchmark in ways that support brand success, schedule your personalized metiRi demo today.

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