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Understanding Unit Economics - the Key to Franchisor Growth and Profitability

Understanding Unit Economics - the Key to Franchisor Growth and Profitability . Rusty Luhring. 30 year software entrepreneur Extensive experience in financial modeling Works with both large and small businesses in the U.S. and Europe. AlphaGraphics – customer since 2005. Kevin Cushing, CEO

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Understanding Unit Economics - the Key to Franchisor Growth and Profitability

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  1. Understanding Unit Economics - the Key to Franchisor Growth and Profitability

  2. Rusty Luhring 30 year software entrepreneur Extensive experience in financial modeling Works with both large and small businesses in the U.S. and Europe _________________________________________________________________________________

  3. AlphaGraphics – customer since 2005 Kevin Cushing, CEO “We’re fortunate. We were in early with Rusty and Philip, I think, and as a result, we were able to develop a, ‘Hey, we’re in this together.’ And even though we’re your customer, we want to be a part of the development path.” _________________________________________________________________________________

  4. Today’s Webinar - learn how to: • Import financials electronically and map them to a common format • Rank, compare and benchmark franchisee profitability and cash flow • Put franchisee financials at your fingertips • Analyze and understand franchisee and location-level financial performance • Get franchisees excited and motivated to improve their results

  5. Philip Campbell • CPA • 27 years experience (including 10 years as a franchise company CFO) • Passion for helping business owners • Author of Never Run Out of Cash

  6. It’s About Getting Answers • How am I doing compared to others? • What areas do I have the most potential for improvement? • What is the dollar amount of improvement that’s possible? • Where should I put my focus? _________________________________________________________________________________

  7. Flying Blind in Franchising • Why this problem is unique to franchisors _________________________________________________________________________________

  8. The Old Challenge • Past attempts not successful • Was labor intensive • Common format “translation” • Manual data entry • Time intensive • Lack of a reporting tool _________________________________________________________________________________

  9. 10 Steps to Success • Demonstrate value in advance • Key performance measures • Financial and non-financial data • Common format • Electronic format _________________________________________________________________________________

  10. 10 Steps to Success • Provide frequent updates • Include 24 to 36 months of results • Shine the light on cash flow • Ability to slice, dice, and filter • Calculate improvement opportunity _________________________________________________________________________________

  11. Import Financials Electronically AccPac QB 2010 QB 2007 QB 2005 QB 2003 QB Enterprise QB Online QB Mac vs PC Great Plains _________________________________________________________________________________

  12. Sample Income Statement exported from QuickBooks _________________________________________________________________________________

  13. Mapping Screen in SurvivalWare _________________________________________________________________________________

  14. Rank, Compare, Benchmark • Ranking Reports • Dashboards • Comparison Graphs _________________________________________________________________________________

  15. Example Ranking Report _________________________________________________________________________________

  16. Sample Dashboard _________________________________________________________________________________

  17. Sample Comparison Graph _________________________________________________________________________________

  18. Franchisee financials at your fingertips.. Live demo _________________________________________________________________________________

  19. Analyze and understand location-level financial performance _________________________________________________________________________________

  20. Wouldn’t it be nice to have this info available for any measure? _________________________________________________________________________________

  21. Get franchisees excited and motivated to improve their results Chris Walker, AlphaGraphics franchisee: “SurvivalWare is a key component of our operation. A key measurement tool, particularly against other franchisees in the network.” “When you see the hard and fast numbers that we got out of SurvivalWare, it became an all hands on deck approach to solving the problem.” _________________________________________________________________________________

  22. Summary: The SurvivalWare Solution • Two ways to use the tool • The Secret • Here’s how it works _________________________________________________________________________________

  23. Software at Franchisor Access to the numbers from all stores Create and distribute rankings Create focus and clarity for support team Facilitate sharing of best practices Software at Franchisee View into 24 to 36 months of KPI results Graphical dashboard so trends jump out at you Multi store owners have access to rankings Create cash flow projections you can trust Two Ways to Use the Tool _________________________________________________________________________________

  24. The Secret • Common format with 24 to 36 months of history • Financial and non-financial measures • Monthly visibility to stimulate action • Intense focus on KPIs • Electronic format • Ability to slice and dice, rank, compare, and benchmark on any financial measure _________________________________________________________________________________

  25. Here’s How it Works • Financial statements are exported from your accounting system • One time “mapping” to the common chart of accounts • Monthly import of financial data • Non financial data reported to franchisor can be imported directly _________________________________________________________________________________

  26. Here’s How it Works (Cont.) • Financial data loaded at the account level (no detailed transactions loaded) • Can import from any accounting system that can export financials • History can still be captured even if franchisee chart of accounts has changed to the new common chart _________________________________________________________________________________

  27. More information • View videos on SurvivalWare website www.survivalware.com – select Learn More _________________________________________________________________________________

  28. More information • Call for free consultation: • Rusty Luhring 703-780-2044 rusty@survivalware.com • Philip Campbell 713-962-1646 pcampbell@NeverRunOutOfCash.com _________________________________________________________________________________

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