Average Unit Volume, or AUV, is a fundamental metric in the world of franchising in the United States. It refers to the average sales that a franchise unit generates in a specific period of time, usually a year.
In this article, we teach you how to calculate it, because this figure is crucial for both franchisors and franchisees, as it provides a clear view of the financial performance of a franchise location. Read on to learn about the importance of understanding the AUV before investing in a franchise!
How a franchise AUV is measured
Calculating this indicator involves adding up all the sales of a franchise unit during a given period and then dividing that amount by the number of units in operation. For example, if a franchise has 10 locations and generates $1 million in total sales over a year, its AUV would be $100,000.
Importance of knowing the AUV of a franchise
The AUV is a key indicator of a franchise’s performance. For franchisors, a high AUV can indicate the popularity of the brand, the effectiveness of the business model , and the strength of the support provided to franchisees. On the other hand, for franchisees, a strong AUV can translate into higher profits and a higher likelihood of long-term success.
What factors influence it
Several factors can influence a franchise’s AUV, including location, staff quality, local competition, market trends, and the effectiveness of local marketing. For example, a location in a high-traffic area may result in a higher AUV than a location in a less crowded residential area.
How to improve it
To increase the Average Unit Volume, franchisees and franchisors can implement various strategies, such as improving the customer experience, optimizing inventory management, launching targeted marketing campaigns, and offering new products or services that meet the needs of the local market.
If you are considering investing in a franchise and want to make sure you make an informed and strategic choice, do not hesitate to contact us. At Interlink FBC we are ready to provide you with a detailed analysis of the Average Unit Volume (AUV) and other key indicators that will define the potential for success of your investment.
Don’t make decisions blindly; Let us help you evaluate and select the franchise that best suits your financial and professional goals. Contact us TODAY and take the first step towards profitability in the world of franchising!
