Cost per lead tells you what a form fill cost. Cost per signed franchise tells you what a signed franchise agreement cost. For a recruitment budget, the second number is the one that connects spend to growth.
The formula is recruitment cost divided by signed franchise agreements. Three decisions sit inside that division, and a report that doesn’t state them can’t be read properly. This guide covers each decision and includes a working calculator.
Decision 1: the unit
In this guide, cost per signed franchise means cost per signed franchise agreement, net of reversals. One agreement isn’t always one new owner, and it isn’t always one location. Report those as separately named companion measures:
| Measure | Denominator | When it differs |
|---|---|---|
| Cost per signed franchise | Net signed agreements | (headline) |
| Cost per awarded unit | Units awarded under those agreements | A three-unit development deal is 1 agreement but 3 units |
| Cost per opening | Units actually opened | Openings lag signings, sometimes by a long time |
Reversals are two different numbers, so keep both:
- Cohort net outcome: for each inquiry cohort, gross signings minus reversals of those same agreements by the cutoff. An agreement from a February inquiry that’s rescinded in August lowers February’s net.
- Period activity: the same reversal also counts as one reversal in August’s activity report.
Keep gross signings, log every reversal with the agreement ID, its original cohort and the date, and never delete a rescinded agreement from an old report. Enter 0 when there were no reversals. A blank means “not reported” and stops the calculation.
Decision 2: which costs
| View | Includes | Answers |
|---|---|---|
| Media cost per signed franchise | Ad spend only | Is the paid channel efficient? |
| Included cost per signed franchise | Ad spend, agency fees, content production, a recruitment staff allocation, and later costs tied to the cohort (such as broker success fees) | What did recruitment cost per agreement, under our stated allocation? |
Name the second view “included” and list the inclusions, because “all-in” invites someone to point out a cost you left out. State the allocation method for shared costs. Our default is logged recruitment rep hours × the loaded hourly rate. Use $35/hour as a planning base and $50/hour as a high case, replacing both with your actual loaded costs when available. These are assumptions, not a franchise-industry benchmark. Where time logs are absent, graded-inquiry allocation is a labeled fallback. The fictional calculator below uses that fallback. For example: “Recruitment staff cost is split across cohorts by number of graded inquiries.”
Don’t compare a media-only ads figure with a broker figure that includes the success fee. One is a partial cost, the other is close to a full one.
Decision 3: the period
Franchise sales take months. Dividing this month’s spend by this month’s signings gives a period ratio. That’s a reasonable measure of the month’s activity, but it doesn’t measure what this month’s new inquiries will eventually cost.
For that, use cohorts. Group candidates by the month they first inquired, then follow the group forward.
A cohort’s cost has two parts: spend in its acquisition month, plus later costs tied to its candidates. A broker success fee paid in August for a March inquiry belongs to the March cohort. State whether a number is acquisition-month media only, or included costs allocated through the cutoff.
The calculator
Fictional franchisor. USD. Cutoff 30 September 2026. Age is counted in whole months from the cohort month’s end to the cutoff.
| Cohort | Media spend | Other included cost | Later allocated cost | Inquiries | Graded Qualified | Qualified rate | Gross / reversals / net signed | Units awarded (net) | Media cost per signed franchise | Included cost per signed franchise | Included cost per awarded unit | Age |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Feb | $8,000 | $4,000 | $0 | 110 | 20 | 18.2% | 2 / 1 / 1 | 1 | $8,000 | $12,000 | $12,000 | 7 mo |
| Mar | $9,000 | $4,500 | $3,000 | 120 | 22 | 18.3% | 3 / 0 / 3 | 5 | $3,000 | $5,500 | $3,300 | 6 mo |
| Apr | $9,000 | $4,500 | $0 | 135 | 25 | 18.5% | 1 / 0 / 1 | 1 | $9,000 | $13,500 | $13,500 | 5 mo |
| May | $12,000 | $6,000 | $0 | 160 | 31 | 19.4% | 0 / 0 / 0 | 0 | not calculable | not calculable | not calculable | 4 mo |
| Jun | $11,000 | $5,500 | $0 | 150 | 28 | 18.7% | (blank) | (blank) | not reported | not reported | not reported | 3 mo |
How to read it:
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February shows a reversal. Two agreements were signed and one was rescinded on 12 August (agreement AGR-0207). February’s net is 1, so its cost is calculated on 1, not 2. The same reversal appears once in August’s activity report. The workbook’s Reversal ledger sheet shows both.
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March’s $3,000 later cost is a broker success fee for one of its three signings, paid in August and allocated back to March. Leave it out and March’s included cost per signed franchise drops from $5,500 to $4,500.
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March shows the unit difference. One of its three agreements is a three-unit deal, so 3 agreements and 5 units give $5,500 per signed franchise but $3,300 per awarded unit.
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April currently has three times March’s observed media cost per signed franchise. The cohorts are different ages, so this isn’t a like-for-like comparison. Compare them at the same observation age. The table can’t tell you how April will end up.
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May has zero signings, so the cost is “not calculable”, not $0. A zero in that cell would suggest recruitment was free.
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June is blank because signings haven’t been reported yet. Blank isn’t zero. The calculator shows “not reported” and does no maths on it.
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Qualified rates are close (18.2% to 19.4%). May’s higher Qualified count mostly reflects more inquiries, not obviously better quality.
Attribution: state your rule
A candidate clicks an ad in March, comes back through search in May, and is introduced to a broker in July. Which channel gets the signing? There’s no single correct answer, only a stated rule. Pick one (first known source, inquiry source, or contractual credit for broker deals), write it on the report, and show signings with an unknown source as their own row.
Contractual credit and marketing attribution are separate questions. The broker may be owed the fee even though an ad started the journey. Report both when both matter.
Put this header on every report
Unit: signed franchise agreements, net of reversals · Cost: included (media, agency, production, recruitment staff allocation by graded inquiries (fallback; time logs unavailable), cohort-allocated broker fees) · Currency: USD · Cohort: first inquiry month · Cutoff: 30 Sep 2026 · Age: whole months to cutoff · Attribution: inquiry source; unknown shown separately
Start here
Open the calculator. Enter your last six months by first-inquiry month. Leave signings blank where they aren’t reported yet, and enter zero only where there were genuinely none. Then compare only cohorts of equal age.
Download: cost-per-signed-calculator.xlsx. The formulas recalculate when you change any blue input. An input check column catches bad entries: negative or fractional signings, reversals greater than signings, or a blank reversal count. When it fires, the cost columns show the problem instead of a number, so those signing-count errors do not become numeric acquisition-cost KPIs. Review cost inputs and allocations too; these checks do not establish that every input is complete or correct. The Formulas sheet lists each formula as reference text. There’s also a CSV copy.
Related: Source tracking · Ad leads versus CRM · Qualifying candidates
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