06/25/2026
Mid-year is the right time for multi-unit operators to do a real cash flow check. ⛽
The reason: you have enough data from the first half to make a meaningful projection for the back half, and enough runway to actually act on it.
Four numbers we look at every June:
Year-over-year sales per unit. Aggregate growth at the portfolio level can hide a single unit that is materially down. Pull the data per location.
Unit-level cash conversion. Some units run at 12% operating cash flow on revenue. Some run at 4%. Same brand, different operator decisions. The gap is where the next 18 months of improvement work lives.
Working capital cycle. AR days, inventory days, AP days. For service franchises, AR is usually the leak. For product franchises, inventory is usually the leak.
Royalty rate vs effective rate. The contract rate is one number. The actual rate after fees, technology charges, marketing fund contributions, and other passthroughs is usually 2 to 4 points higher. Track the all-in number.
Mid-year is the cleanest moment to fix what's drifting. Year-end is too late, and tax season is way too late.
