young franchisee wearing boxing gloves
Published December 11, 2020

10 Ways to Combat Franchisee Disengagement

Research conducted by Franchise Business Review shows that franchise brands with satisfied franchisees have median annual growth 400% greater than the competition.

In a typical franchise relationship franchisees typically tend to disengage somewhere around five years into the business, according to Greg Nathan of the Franchise Relationships Institute. As they become more confident and successful running their business, they may start to question what they’re getting in return  for their royalty fees.

If you want to keep your franchisees engaged long term and increase their satisfaction, follow these 10 tips:

1. Operate transparently. Transparency isn’t just the latest corporate buzzword, it’s a must. Companies that are open and share information with their franchisees tend to have higher franchisee satisfaction ratings. Case in point: One client shared that when they made their national advertising fund line items visible to franchisees, they got stronger buy-in and actually had UNANIMOUS approval to RAISE their marketing fee.

2. Measure success. Benchmarking key performance indicators against other franchise brands—and sharing the information with your franchisees—helps them understand how your brand stacks up against competitors. It also helps determine which areas of your business need improvement to ensure marketplace competitiveness.

3. Set realistic expectations. Having clearly defined expectations that both franchisees and franchisors agree to is a critical first step to increasing performance.

4. Understand the big picture. A franchisee’s personal goals are going to be the primary drivers behind setting and reaching their business goals, yet many franchisors don’t take the time to learn and fully understand their franchisees’ personal objectives. It’s important to work with them on outlining an actionable vision plan that will help them achieve long-term success.

5. Offer peer support. One of the reasons people choose franchising is the support they can gain from their fellow franchisees—not just from corporate.. Brands that have happy franchisees encourage and facilitate a culture of sharing best practices and mentorship among their franchisees.

6. Provide ongoing training. Sure, all your new franchisees go through initial training. But what about your tenured franchisees? Research shows that support and, in turn, franchisee satisfaction tends to decline after the first several years in business. Keep your franchisees engaged by providing them with tools and support to take their business to the next level.

7. Trust your franchisees. Most of your franchisees likely feel that they own the brand just as much as you do. Share corporate and unit-level data with them, involve them in major decisions, and ask their opinions frequently. Leverage your Franchise Advisory Council (FAC) and other committees whenever possible.

8. Be flexible. The idea of a franchise is that the successful business model is replicated over and over and the franchisees follow the system. But franchisees also chose to go into business on their own—likely to have some degree of autonomy in their personal and professional lives. The more options you can offer your franchisees to help them meet their goals, the happier they’ll be.

9. Do an annual survey. The easiest way for franchisees to share feedback with you on a regular basis is an annual franchisee satisfaction survey. The results will show you where you are excelling and where ROI-boosting improvements can be made.

1o. Implement an action plan. Surveying your franchisees is a good start, but to raise satisfaction you need to act on the feedback they provide. Use your survey results to prioritize your corporate goals for the coming year.

Franchise Business Review surveys thousands of franchisees annually to provide franchisors with benchmarking data on how satisfied their franchisees are. Read our white paper, 10 Roadblocks Standing in the Way of Franchisee Satisfaction, to learn more about how to identify and overcome the most common obstacles to building a franchise system full of satisfied, growth-minded franchise owners based on our over 10 years of market research.

You can have your actionable franchisee satisfaction survey results in just two to four weeks. Get started now.


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About the Author: Ali Forman

As the Marketing Director, Ali’s role is to educate franchise companies about and inspire them to participate in FBR’s research in order to grow and improve their brands. Ali lives in Maine with her husband and two sons.
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