Franchise Performance Benchmark Report

Data-Driven Insights for Accelerated Growth
325+
High-CAPEX Franchise Systems
4
Industry Categories Analyzed
$1M+
Minimum Investment Threshold
🤖 AI-POWERED Frannie AI Data Analyst | FranConnect Intelligence Platform
June 17, 2025 | Executive Summary

About the Data – Sources, Methodology and Benchmark Scope

🤖 Analysis Powered by Frannie AI

What This Benchmark Includes

Comparative insights across four high-capex, non-restaurant franchise categories:

  • Education
  • Other Personal Services
  • Retail/Automotive
  • Healthcare
$1M+
minimum investment
325+
U.S franchise systems

Data Sources

  • TE's FranConnect Usage Data
  • Anonymized FranConnect Sales and Operations Index Analytics
  • Franchise Disclosure Documents 2023 – 2025 (high-capex, non-restaurant brands)
Data Sources Cross-validated for accuracy and checked for exceptions

Why This Data Matters

  • First of a kind analysis that looks at usage, industry benchmark and FDD data
  • Every recommendation is backed by measurable performance differences.
  • Helps TE align its systems for scalable growth.
This comprehensive approach provides key insights into franchise performance drivers

Current State Assessment

Strong unit economics ($2.5M AUV, 23% EBITDA) prove concept viability, with improving franchise execution. Focus needed on accelerating time to open and converting SBNO pipeline.
$2.5M
Average Unit Volume
Top-tier performance
1.4%
Close Rate
~273 leads per deal
18mo
Time to Open
vs. 12mo peer average
23%
EBITDA Margin
Industry leading

Location Status Breakdown

16
Active Locations
13 Corporate + 3 Franchise
12
In Development
8 Corporate + 4 Franchise
20
SBNO Pipeline
Franchise Only - Priority Focus

Industry Growth Performance vs. Predictions

Execution beats predictions: Well-managed systems achieved 2.1x the industry forecast. Franchising delivered 5.5% growth vs. the 2.6% forecast through 11% more openings and 14.8% fewer closures.

Key Industry Insights:

  • Multi-unit development is table stakes: 78.2% for large brands
  • Digital engagement reduces failure rates by 12.4%
  • High-performing brands grow 5.3 months faster
  • 59% surge in resource usage drives performance gains

Franchise Development: Conversion & Lead Sources

TE's close rate is close to peer averages, but its multi-unit deal structure aligns with high-growth retail and fitness brands.
Sector Leads per Closed Franchise % Deals with 2+ Units Conversion Rate
Tierra Encantada 273 42% 1.4%
Education 248 45% 1.8%
Wellness 288 53% 1.6%
Retail/Automotive 235 62% 2.0%
Healthcare 208 38% 2.1%

Development Recommendations:

  • Prioritize referrals and brokers (4-6% conversion vs. <2% digital)
  • Share benchmarks early in sales cycle to build trust
  • Include multi-unit pacing clause with deadlines (Unit 1 in 12 months)
  • Target 2% conversion rate improvement

New Location Opening: Time-to-Open & SBNO Management

TE's average time to open is ~50% longer than peers, with significantly higher SBNOs requiring dedicated focus.
Sector Time to Open (months) SBNO Duration (months) % Multi-Unit Developers
Tierra Encantada 18 27 50%
Education 12 14 45%
Wellness 9 9 70%
Retail/Automotive 10 11 80%
Healthcare 12 14 60%

SBNO Reduction Strategies:

  • Track unit-level milestones from signing to open
  • Assign a launch lead for each new unit
  • Standardize vendor sourcing with regional directory
  • Flag SBNO units stalled beyond 12-15 months
  • Target: Reduce to 12 months average

Financial Performance: Unit Economics

TE outperforms peers in both revenue per unit and profitability, based on 2025 FDD benchmarks.

Financial Optimization:

  • Launch enrollment 60-90 days pre-opening
  • Benchmark labor, rent, and food costs
  • Expand preferred vendor use linked to COGS targets
  • Implement real-time margin dashboards
Sector AUV ($M) EBITDA Margin (%) Performance vs. TE
Tierra Encantada $2.5M 23.0% Industry Leader
Education $1.8M 15.5% -28% AUV
Wellness $1.4M 21.5% -44% AUV
Retail/Automotive $1.7M 15.0% -32% AUV
Healthcare $1.6M 13.0% -36% AUV

Training and Engagement

TE's onboarding hours (104) are comparable to top-tier education and healthcare franchises, with moderate initial training investment.
Sector Initial Training Hours Ongoing Training Hours Completion Rate (%)
Tierra Encantada 104 20 N/A
Education 160 24 88%
Wellness 68 12 72%
Retail/Automotive 78 15 78%
Healthcare 100 18 82%

Training Enhancement:

  • Create role-based LMS tracks (Director, Chef, Teacher)
  • Set annual training goals for licensing compliance
  • Foster community-based learning culture
  • Track completion rates for operational consistency

Strategic Recommendations

Priority Implementation Timeline: Q3-Q4 2025

🎯 Improve Lead-to-Sale Conversion

Target: 2% conversion rate
  • Focus on qualified broker referrals and multi-unit developers
  • Share financial benchmarks early in sales cycle

⚡ Accelerate SBNO Pipeline

Target: 12 months average
  • Convert 20 SBNO units through dedicated support
  • Implement milestone tracking system

🔧 Digitize Franchise Support

Deploy across all locations
  • Mobile audit apps and automated checklists
  • Real-time support dashboards

📊 Launch Performance Monitoring

Weekly KPIs for all locations
  • Track enrollment, revenue, and satisfaction metrics
  • Automated alerts for early intervention

FranConnect Platform Optimization

Strong foundation with 70% adoption across core modules. Ready to leverage advanced sales and opening acceleration tools for systematic growth.
36
Active Users (+12.5%)
140
Days Active
58
PES Score (70% adoption)
5d 22h
Total Platform Usage

Sales Acceleration & Lead Management

🎯 Lead Source Analytics & ROI Tracking

1.4% Current Conversion
2.0% Target Conversion
  • Sales Optimization Dashboard: Track close rates and decision time by source
  • Automated Workflow Triggers: Send discovery kits when leads reach "Qualified" stage
  • Multi-Unit Development Tracking: Monitor Unit 1/2/3 timelines with ownership fields
  • Broker Performance Analytics: Identify top-performing referral sources (4-6% conversion vs <2% digital)
Implementation: Requires Analytics + Sales modules

Expected Impact:

  • Improve conversion from 1.4% to 2.0% (43% increase)
  • Reduce lead cost per closed franchise by 30%
  • Accelerate qualified lead identification by 50%
  • Increase multi-unit deal closure by 25%

SBNO Acceleration & Opening Management

⚡ Systematic SBNO Pipeline Management

20 Current SBNO Units
12mo Target Timeline
  • SBNO Lifecycle Dashboard: Monitor LOI-to-Open units with visual status tracking
  • Milestone Workflow Automation: Set checklists with target dates (permits in 45 days) and auto-reminders
  • Launch Coach Assignment System: Assign dedicated coordinators via Custom Profiles and Task Management
  • Escalation Protocols: Auto-flag units stalled beyond 12-15 months for executive review
  • Vendor Network Integration: Standardized regional directory to reduce build time variation
Implementation: Requires Opener module

Expected Impact:

  • Reduce time-to-open from 18mo to 12mo (33% improvement)
  • Convert 20 SBNO units to active within 6 months
  • Eliminate development bottlenecks through systematic tracking
  • Improve franchisee satisfaction during opening phase

Operations Excellence & Performance Monitoring

📊 Real-Time Performance Dashboards

$2.5M Current AUV
23% EBITDA Margin
  • Digital Audit System: Mobile-enabled checklists with photo proof and instant scoring
  • Financial Performance Tracking: P&L Analytics with labor %, rent %, and food cost benchmarking
  • Tiered Support Model: Risk-based coaching with intensive support for new units, on-demand for established performers
  • Training Completion Analytics: Role-based LMS tracking for Directors, Chefs, and Teachers
  • Franchisee Health Scoring: Combine audit, training, and financial data to predict and prevent issues
Implementation: Requires Hub + Operations + Analytics

Expected Impact:

  • Maintain industry-leading 23% EBITDA margins
  • Reduce audit completion time by 60%
  • Increase training completion rates to 85%+
  • Proactive issue identification and resolution