Franchisees are like all business owners – looking to make a profit out of their investment and their daily labours. Yet there is a surprising absence of focus on profit margins and how they can be increased within the franchising industry.

It’s a matter that concerns some franchisors and franchisees. It is also an issue which has been raised in surveys by 10Thousand Feet, a franchise-friendly research company. In the latest Franchisee Satisfaction Survey franchisees were asked whether their franchise system provided ongoing financial guidance with a view to better profit at franchisee level.

As the graph here indicates, just a handful of franchisees are fiercely supportive of their franchisor’s actions in the profit support area, while substantially more notice the lack of assistance.

Encouragingly the red bars reveal an increase in this area over 2008. Ian Krawitz, head of intelligence at 10Thousand Feet, is aware that legal opinion prevents many franchisors from doing more in this field. He suggests there are some questions that incoming franchisees need to consider in relation to financial monitoring before stepping down the path of signing an agreement.

For instance does the franchisor collect profit and loss statements from franchisees on a regular basis and provide feedback for improvements? Are franchisees required to complete and submit annual business plans to the franchisor? And does the franchisor understand what drives customer behaviour and monitor the leading indicators of customer engagement to help franchisees drive their customers to spend more, more often?