Franchise KPI Guide: Top Metrics to Monitor Monthly

by | May 7, 2025

Franchise Financial Reporting Series – Part 5 of 6

Franchise owners don’t need more data — they need the right data. The following KPIs are essential for tracking operational health, managing risk, and scaling successfully. These are the numbers that should be in every monthly report.

Download: Top Metrics Every Franchise Owner Should Track Monthly

“Our franchisees now get a one-page summary of KPIs each month. They can instantly see how they’re doing without digging through spreadsheets.”
– QuickBooks User

Labor % of Sales

This shows how much of your revenue is going toward payroll. It’s one of the most controllable expenses, and even a 1% swing can significantly impact net margin. A rising percentage often signals overstaffing or productivity issues.

Cost of Goods Sold (COGS %)

COGS includes all the direct costs of producing goods sold by a franchise. Tracking this monthly helps you stay ahead of supplier changes, shrinkage, or inefficiencies in production. Low margin? COGS is often the first place to look.

Net Profit Margin

How much of each dollar earned actually becomes profit? This is the ultimate indicator of financial health. Franchise owners should know this number monthly to make quick decisions on spending, staffing, or promotions.

Revenue by Location

Revenue breakdown by unit allows you to identify your strongest performers and those needing attention. Used well, this KPI helps with strategic decisions like reallocation of resources or peer coaching.

Bonus: Franchise Red Flags Diagnostic Checklist

This quick-reference checklist helps you spot financial red flags before they become serious problems. Use it to review monthly or quarterly franchise reports and keep each location on track.

Download Checklist (PDF)

Budget vs. Actual

One of the most important monthly checks. This visual comparison tells you whether your locations are hitting goals or missing them — and by how much. It’s a foundational tool for accountability and forecasting.

Overhead as a % of Sales

This metric highlights fixed expenses like rent, admin, and utilities. Keeping overhead in check ensures more of your revenue flows to the bottom line — especially during slow months or seasonal dips.

Customer Acquisition Cost (CAC)

This is the total cost to acquire one new customer. Rising CAC can signal inefficiencies in marketing or sales. Combine it with lifetime value (LTV) to ensure sustainable growth.

Break-even Forecast

Knowing when each location will cover its costs is vital for financial planning. This KPI helps set realistic expectations and flags underperforming stores before it’s too late.

Real Use Case: After introducing monthly KPI reviews, one franchise system discovered three locations operating below break-even. They restructured staff schedules and marketing budgets — and all three became profitable within two months.

Want to learn how to visualize these KPIs for faster decision-making? Check out Part 4 in our series.

Bonus: Monthly KPI Checklist

Need a quick way to track KPIs across your locations? Download our printable checklist to stay focused and aligned all month long.

Download Checklist (PDF)

Real Use Case: After introducing monthly KPI reviews, one franchise system discovered three locations operating below break-even. They restructured staff schedules and marketing budgets — and all three became profitable within two months.

Download the Franchise Sample Report

Our downloadable report includes each KPI laid out clearly across all locations.

Download the Sample Report (PDF)

Start Reporting Like a Franchise Pro

Ready to simplify your reporting? Try Reach Reporting free for 30 days or schedule a live demo.

People Also Asked

Q: What KPIs should every franchise owner track monthly?

A: Labor %, COGS %, Net Margin, Revenue by Location, CAC, and Break-even Forecast are among the top metrics for growth and efficiency.

 

Q: How can I help franchisees understand their KPIs?

A: Use visual dashboards and narrative insights that explain what each metric means and how to respond to it.

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