New Franchise Ratings System to focus on performance and transparency

FRANdata this week launched a new objective ratings system for Australian franchise brands. If US experience is a guide, the ratings system will quickly become the key industry standard for performance assessment and comparison.

FRANdata's rating system recognises that renewed and enduring confidence in franchising requires a focus on performance and transparency. A similar message has emerged from evidence to the recent Parliamentary Inquiry into Franchising.

FRANdata has built a set of standards to enable a consistent evaluation of Australian franchise systems. The foundation of these standards is the objective measurement of performance across critical areas of a franchise system.

The performance outcome metric is a graduated star rating scale. The Franchise Rating Scale™ is underpinned by seven performance standards which include:

  1. System Performance
  2. Franchisee Financial Performance
  3. Franchisee Engagement and Satisfaction
  4. Franchisor Training and Support
  5. Franchisor Financial Performance
  6. Lender Relations
  7. Compliance

Independent rating systems are nothing new, even in franchising. However, they are new to Australian franchising, and arguably long overdue. Specific franchise rating systems are widely used in the US.

FRANdata’s US CEO, Darrell Johnson, said:

“In the US FRANdata has been providing ratings systems and services for 30 years. There are two keys to successful ratings systems – the assessment must be conducted independently, and the assessment must be objectively based on factors relevant to the decision of th e prospective franchisee and others (such as financiers) involved in the transaction. The Australian franchise ratings system will bring both”.

The ratings system will be quickly embraced by quality franchise systems seeking opportunities to objectively differentiate themselves in a competitive market. Financiers, investors, prospective franchisees, regulators and even the media are likely to be attracted to the independence and objectivity of the new system.

For further information please contact Darryn McAuliffe on (02) 8346 6093 or dmcauliffe@frandata.com.au

 

FRANdata and Franchise Ratings

FRANdata Australia is Australia’s leading franchise business intelligence and information advisory business. They have an established and strong track record of rating franchise systems. For example, they supplied the methodology that the US Forbes publication uses to compile its annual best and worst franchise list; created the three tiered recognition system required to participate in the US Vetfran program; and built the Franchise Underwriting (FUND) score model relied upon by the US franchise-lending community.

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