Benchmarking is a total necessity for franchise organizations that want to grow while focusing on unit-level economics. Besides looking to industry standards, a franchised company can find the best results doing internal benchmarking by all units to see system-wide averages and set goals for underperforming franchisees.
Most often, franchisees will make adjustments on their own if they can see they are underperforming. After all, they should be the ones most motivated for the success of their business. Providing them plain, black and white evidence is much more potent than random observations or vague assertions.
What should you benchmark? Only the actionable figures that are reliable and trackable. If you can't change it, then it's wasting your time and clouding up the numbers that may need to be addressed. If the franchisor's focus is having the most profitable franchisees, which in my opinion it should be, then benchmarking should be done on all the top actionable financial figures, which are usually the variable costs and sales. But just as necessary are the underlying numbers that affect the financial data. Some examples are customer feedback, service times, evaluation scores, and product quality scoring. Having a uniform way to put a number on the items that affect your profit is critical, just as sharing your findings to the franchisees is as well.
Taking the time to get the correct benchmarks, and having a system to share them can be the best support you can offer your franchisees. It is undoubtedly a more pro-franchisee approach than what many franchisors do, which is to complain or scold an underperforming franchisee. The latter situation can create animosity, which can destroy a franchise.
Fran Metrics specializes in capturing and sharing such information. Regardless if you hire someone or not, you should be benchmarking!