Fran Metrics Founder, Jason West McReynolds Reveals Top KPIs for Franchises

Patrick Findaro from Vetted Biz recently interviewed Jason West McReynolds, founder of Fran Metrics, a software company that helps franchisors collect and analyze franchisee data, including financial information required for Item 19 in Franchise Disclosure Documents (FDDs). Jason’s background as a CFO in the pizza franchise industry gave him firsthand experience with the challenges of data collection and inspired him to create Fran Metrics to address these issues.

From CFO to Franchise Data Specialist: Jason’s Journey

Before founding Fran Metrics, Jason served as CFO of a pizza franchise, where he faced the challenge of collecting reliable data from franchisees. “As a CFO, if I don’t have data, how can I make informed decisions?” he explains. Jason recognized that a franchisor’s success is directly tied to the success of its franchisees, so he set out to develop a system that would provide clear, actionable data to support franchisee profitability.

Solving Data Collection Challenges for Franchisors

Jason’s primary goal with Fran Metrics is to help franchisors streamline data collection at the unit level, which is often complicated by varying operational costs among franchisees. “We work with each franchise to define operational costs versus personal expenses, so we get accurate, actionable data,” he says. By distinguishing necessary business expenses from discretionary spending, Fran Metrics provides a clearer picture of unit economics, allowing franchisors to support franchisees more effectively.

Supporting Item 19 Compliance and Profitability

One of Fran Metrics’ key functions is helping franchisors prepare Item 19 financial disclosures. By creating a consistent and accurate reporting structure, Fran Metrics enables franchisors to present meaningful economic data to potential franchisees. Jason explains, “We remove expenses that aren’t essential for running the business, making the disclosure more favorable and accurate.” This approach not only benefits franchisors but also supports franchisees by setting realistic financial benchmarks.

Building Franchisee Trust Through Data

Jason stresses the importance of gaining franchisee buy-in for data collection. “We don’t just ask for data to sell more units,” he says. Instead, Fran Metrics provides franchisees with insights into their own operations, helping them identify areas for improvement and increase profitability. This dual focus on franchisor and franchisee success has made Fran Metrics a valuable tool for emerging and established brands alike.

Overcoming Obstacles in Financial Reporting

For franchisors, managing financial reporting across dozens or hundreds of franchisees can be overwhelming. Jason notes that outdated franchise agreements often lack provisions for mandatory monthly financial reporting, making it difficult to obtain comprehensive data. Fran Metrics addresses this by providing a centralized platform that simplifies data submission, eliminating the need for manual spreadsheets and reducing administrative costs.

Identifying Key Performance Indicators (KPIs) for Franchises

Jason emphasizes the importance of identifying actionable KPIs for franchise success. “KPIs need to be important, accurate, and actionable to add value,” he explains. Fran Metrics develops custom scorecards that focus on KPIs essential to unit-level performance, allowing franchisors to monitor and improve franchisee success. Unlike traditional profit and loss statements, which often include irrelevant data, these scorecards provide franchisors and franchisees with clear insights into business performance.

Enhancing Transparency and Profitability

At the end of the day, franchisees want to know two things: their payback period and owner benefit. By standardizing expenses and revenue data, Fran Metrics allows franchisees to focus on what’s essential for profitability. This approach fosters transparency, giving franchisees confidence in the numbers presented in their FDD and providing potential investors with realistic financial expectations.