Predictive Insights Highlights Data To Action Gap Driving Performance Divide In Franchises

Yet, despite strong systems, abundant data, and well-developed processes, many franchise groups still struggle with steady growth and consistent performance across all their stores.

These issues were highlighted at the latest Franchise Coaches network breakfast, hosted in partnership with Nedbank. Speakers Neil Rankin, CEO, and Lize Monametsi, chief growth officer, of Predictive Insights referred to this as the 'franchise paradox'.

'Franchise businesses collect large amounts of information daily. However, turning that information into meaningful action is inconsistent. This is why there is often a big gap between the best-performing stores and the weakest ones. This gap matters more now because costs have increased sharply,' says Rankin.

'Since 2019, the minimum wage has increased by 44% and food costs have risen by about 69%. These increases put pressure on franchise owners to manage their businesses much more carefully, as they directly impact whether businesses can stay profitable and grow.’

It's not just about having better systems

The discussion also challenged the idea that better systems alone will solve the problem. Instead, the focus should be on how information is shared and used when decisions are being made.

Most managers have access to dashboards and reports. These, however, are often too complicated, too slow, or not linked closely enough to what is happening on the ground to make a real difference in performance.

'We need to shift from reports that reflect on what has happened to reports that give managers simple, useful information in real time to improve engagement and performance. This means tailoring the right information at the right moment in a way that suits how each manager and store works,' explains Monametsi.

How data influences behaviour

According to the speakers, comparing store performance transparently is a strong motivator as it encourages accountability and healthy competition between teams. However, for it to work well, feedback needs to be immediate and linked to specific actions.

When managers can see the results of their decisions as they make them, they are more likely to change behaviour and improve performance.

The speakers also highlighted artificial intelligence (AI) as an important tool. 'AI-based forecasting and assessment tools can help reduce mistakes by improving planning for things like stock levels, staffing, and demand. These tools also allow managers to be more proactive by helping them predict what is likely to happen instead of reacting only afterwards,' says Rankin.

Lessons from global franchise systems

The discussion also examined real-world examples from global franchise systems, including companies like Nando's, where forecasting tools have helped reduce food waste and improve cost control across various countries. 'Better use of data clearly works – at both large and small scale. But only if it is properly implemented and used by teams on the ground,' says Monametsi.

However, technology alone is not enough. 'Success still comes down to people and culture. Data tools make a difference only when they are supported by clear feedback, recognition for good performance, and systems that encourage the right behaviour.

This is reinforced by traditional performance targets, which are increasingly being supported by quicker, more immediate feedback to help managers improve how they work.'

Against this backdrop, World Franchise Day's theme takes on deeper significance. The sector's future growth will not depend only on its size or systems, but also on how well it turns available data into consistent performance and plans into reliable execution.

Funding the next generation of franchise growth

Amith Singh, national franchise manager at Nedbank Commercial Banking, says that a central pillar of this future is access to funding. 'If we want more inclusive growth, we need closer cooperation between franchisers, landlords and financial institutions to design funding models that reflect the reality of new and emerging franchise owners.'

Traditional lending models often focus on things like collateral and past financial history. This approach can unintentionally exclude good operators who may not yet have strong balance sheets but are running strong businesses within proven franchise systems.

'To address this, we need more flexible funding approaches – including shared-risk models, blended finance, and better use of franchise performance data in credit decisions,' Singh says.

Franchising is well placed for this because it already generates vast quantities of useful operational data. If that data is used properly, it can give funders a much clearer picture of how individual stores are performing, which helps improve lending decisions and unlocks access to finance.

Beyond capital

'Leveraged this way, banks like Nedbank go beyond being just providers of capital. We see ourselves as partners in the system, helping to build funding pathways that support franchise growth, make businesses more resilient, and widen participation in the economy,' concludes Singh.

Ultimately, resolving the franchise paradox will require more than technology or financial innovation alone. It will depend on how well the sector connects data, decision-making and access to capital in practice. If franchising can close these gaps, it will strengthen its role as a key driver of the economy and a powerful engine for inclusive growth, entrepreneurship and job creation – the very ambition set out in this year's World Franchise Day theme.