Franchise owners face a variety of challenges that can impact profitability. In a recent episode of The Advisory Board Podcast, Dave Hansen sat down with Tommy Yionoulis, Managing Director of OpsAnalitica, to discuss the three biggest profit killers in the franchise industry. With decades of experience in restaurant operations and technology, Tommy has helped businesses streamline their processes, improve accountability, and increase profitability.
For franchise operators, the key to success lies in tracking labor costs, optimizing material usage, and improving the speed of service. Without structured processes, small inefficiencies can add up, cutting deep into a franchise’s bottom line. In this conversation, Tommy outlines practical strategies that franchisees can implement to address these common pitfalls. Below, we break down the key insights from the discussion and explore how franchise owners can take action to eliminate profit killers.
Managing Profit Killers: How Operational Processes Impact Franchisee Profitability (5:58 – 7:59)
One of the primary reasons franchises struggle with profitability is lack of operational consistency. When managers and employees do not follow standardized procedures, businesses experience increased labor costs, wasted materials, and slow service times. Many of these problems stem from controllable human activities that are not being monitored or optimized.
By putting the right systems in place, franchise owners can ensure that daily operational tasks are being completed correctly and efficiently. Even minor inconsistencies in execution can create ripple effects that lead to lost revenue and decreased customer satisfaction.
Real Dollars at Stake: The Managerial-Driven Profit Killer (7:49 – 9:49)
Inconsistent managerial processes are one of the biggest drivers of profit loss. When franchise managers do not monitor labor costs and staffing efficiency, it can lead to excessive payroll expenses. A franchise that implements structured labor check-ins throughout the day can significantly reduce unnecessary spending.
For large franchise systems, even a small 3-4% reduction in labor costs can result in millions of dollars in annual savings. Implementing data-driven decision-making ensures that staffing levels match customer demand, preventing overstaffing during slow periods and understaffing during peak hours.
Accountability and Systems to Boost Profitability (12:19 – 14:19)
One of the key themes discussed in this episode is the importance of accountability in franchise operations. Many businesses rely solely on employee training, assuming that once a procedure is taught, it will always be followed. However, without tracking and accountability measures, employees may cut corners, leading to inconsistent execution and profit loss.
Franchisees who adopt structured tracking systems and digital checklists create an environment where employees are held responsible for daily tasks. By monitoring completion rates and operational performance, managers can identify inefficiencies before they become costly problems.
The Power of Checklists for Franchise Success (23:44 – 25:19)
Standardized checklists have been proven to enhance efficiency and operational consistency in multi-location businesses. Many franchise owners assume their staff are following procedures, but without automated tracking systems, there is no way to ensure compliance.
Digital checklists provide a structured way for franchisees to monitor workflow and improve accountability. By requiring employees to complete and log tasks in real-time, businesses can reduce errors, maintain operational consistency, and increase overall efficiency across locations.
Small Details and Systems Lead to Big Profits (28:40 – 30:32)
Even the smallest operational missteps can create major financial consequences. When daily procedures are overlooked, the result is often higher costs, longer wait times, and lower customer satisfaction. A simple task like ensuring that food is properly prepped and stored can have a direct effect on customer experience and overall sales.
Small operational improvements—such as tracking inventory, optimizing food preparation, and ensuring timely service—can lead to significant long-term financial gains. These refinements not only help protect profit margins but also strengthen a franchise’s ability to scale efficiently.
Wrap up Thoughts
Tommy Yionoulis highlights the importance of systematizing franchise operations to eliminate profit killers. The key takeaways include monitoring labor costs and adjusting staffing based on demand to avoid overspending on payroll, implementing tracking systems to oversee material usage and prevent unnecessary waste, adopting digital checklists and accountability tools to ensure daily procedures are followed correctly, and focusing on small operational details that collectively impact overall profitability.
For franchise owners looking to streamline operations, these strategies provide a clear roadmap to success. By taking control of daily execution and optimizing efficiency, franchises can increase profitability and enhance customer satisfaction.
To listen to the full episode, check it out on Spreaker.
For more information on franchise operations technology, visit OpsAnalitica. If you’re looking for a powerful CRM solution to improve franchise sales and customer engagement, explore ClientTether.
Eliminating operational inefficiencies is one of the most effective ways to increase profitability and scalability. Franchise owners who implement structured systems and accountability tools can create a more efficient, high-performing business that stands out in today’s competitive market.
