7 “Danger” Zones That Franchise Operations Teams Need to Watch

How field support teams can help improve performance by focusing on these key areas of risk 

Each year, Franchise Business Review surveys tens of thousands of franchise owners to benchmark satisfaction in the areas most critical to franchise performance. The year’s data revealed seven surprising “danger zones” that have the biggest negative impact on system success. 

Based on our research of nearly 38,000 franchisees representing 385 brands, we identified the seven areas rated lowest in satisfaction by franchise owners. We ask each franchisee 33 benchmark questions and score their level of satisfaction using our Franchisee Satisfaction Index (FSI), which ranges from 0-100. (Read more about our methodology here.) Year over year, we find these seven areas are where franchise systems struggle the most when it comes to satisfaction and performance.

So let’s dive into the lowest rated areas for most brands—and even more important, how your field support and operations teams can address those areas to improve performance.

Watch the webinar presentation for more inside information on the 7 Danger Zones of Franchise Performance.
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7 Factors that Have the Greatest Impact on Franchise Performance

1. Marketing and Promotional Programs (56 FSI)
Start by setting expectations from the start, making it clear what kind of support the franchisees receive for the fee and what the franchisor is responsible for and what franchisees are responsible for in terms of getting customers in the door. 

Have your support team simplify the options and focus on the programs that have the highest/fastest ROI for new franchisees. Also look at what types of additional supplemental programs you can put in place for mature franchisees who want to grow or expand.

2. Effective Technology (57 FSI)
Hopefully, your brand has in-house tech support and/or third-party vendors working with your franchisees to use technologies effectively. This can include your POS, business operating platform, financial reporting tools, your customer facing app, Google reviews, social media, and everything in between. Your operations support staff should be proactively monitoring these tools and demonstrating to franchisees how effective they are. If your technology is NOT providing value, field support should be reporting back to corporate so they can address issues with their vendors and partners and ensure the  tools and programs you’re using are effective for franchisees.

3. Innovation (57 FSI)
Innovation can take many different forms, but it really encompasses all the ways you’re fostering franchisees’ continual growth, which can be anything from new product offerings to using AI in their businesses. Franchisees often report that new programs/initiatives are rolled out “half baked” and without enough advanced planning time to roll out effectively. This is where field support can play a significant role in creating awareness of new programs, involving franchisees in early testing/pilot programs, and making sure programs are “fully baked” before franchisees are asked to implement. In addition operations teams need to plan and support initiatives to ensure successful launch AND franchisee adoption in their markets. Most importantly, illustrating to the franchisees the ROI or efficiencies of the new innovations—sharing the “WHY?” or “What’s in it for THEM?”—can help speed things along. Your FAC can also be a powerful influencer. Our Building a Franchise Advisory Council That Gets Results workbook walks you through how to use an FAC to get franchisees more involved and get greater buy-in.

4. Franchisee Involvement (58 FSI)
People join a franchise brand to be part of something bigger than themselves. Many fall into the personality profile of “Joiners” and want a sense of community and belonging. Your support rep/coach is the regular face of the brand for the franchisee, and their key responsibility should be to engage with franchisees and make sure their ideas and suggestions are heard and represented to corporate. 

Field support staff can also play a critical role as a lobbyist or brand ambassador on behalf of the franchisees they represent, and help them identify opportunities to get more involved in the organization, whether through local peer groups, serving on various committees/FAC, volunteering to pilot new programs, etc.

Upskill your field support team using our free guide. Find out how to identify and assess the most critical skills for FBCs and how to improve performance.
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5. Financial Performance (59 FSI) 
Every meeting between field support and a franchisee should include significant discussion on how to help the franchisee be more profitable. Over the past five years, the role of the franchise coach has shifted from compliance to a business growth focus. Challenge your coaches to include at least one idea to grow sales, and one idea on how to reduce costs. Simple, easy-to-execute ideas should be favored, and results should be reviewed every 90 days. This is an opportunity to show franchisees you are focused on THEIR bottom line, not just corporate’s top line.

6. Operations and Systems (62 FSI)
Grand opening and launch training and support is like drinking from the firehose for new franchise owners. Field support staff can help by breaking things down and/or simplifying processes for new owners. Coaches should be focused on getting new franchisees to “break-even” as quickly as possible and giving franchisees markers to understand if they’re on track. How can field support staff map out key activities for owners to focus on, and coach them effectively through the first year? One way some of our clients have managed it is by creating specific support staff positions that handle JUST new franchisees for the first year.

On the other end of the spectrum, what value can field support bring to mature franchisees? Franchise Business Review’s Vision Plan Program is an example of how to clearly understand individual franchisees’ goals and make specific recommendations to achieve those goals. Aligning the support team and the franchisee on those goals creates accountability and focus. Having franchisees share with each other can also create peer accountability, and facilitate sharing best practices with each other along the way. 

7. Communications (62 FSI)
Field support teams are caught in the middle of corporate teams and franchisees. They have to balance the goals and needs of both, and be the liaison between them, including reinforcing corporate communications and highlighting key initiatives/programs whenever they are with the franchisee as well as listening intently and reporting the “franchisee experience” back to corporate. 

Consider a communications audit as well. Many franchisees report feeling overwhelmed by the number of communications coming from corporate. Getting visibility into how many messages are hitting franchisees on a daily, weekly or monthly basis, and making sure they’re getting to the right person within the franchisee’s business (e.g., owner vs. location manager) through the right channels, at the right time, can go a long way toward toning down the noise.

The 3 Areas That Really Matter to Franchise Performance

Now that you know where franchisees overall rate their systems lowest, how do you think your franchisees would rate you in those areas? And more importantly, how would they rate you in the areas that matter most? Interestingly, they have nothing to do with the seven danger zones listed above. 

Our benchmarking research has identified three questions on the survey that correlate most closely to “Would you recommend your franchise to others?” If you want to improve performance, these are the three areas to focus on: 

• “My franchisor cares about my success”
• “I trust and respect my franchisor”
• “My total investment has been consistent with my expectations”

There will always be challenges to solve when it comes to marketing, innovation, technology, and the other areas that score poorly year over year. However, the systems that set clear expectations with candidates at the beginning of the franchisee-franchisor relationship and maintaining transparency and accountability throughout the relationship are the ones that will move the needle on franchisee satisfaction, and in turn, over performance. 

If you want an objective assessment of how your franchisees rate you and how your system compares to the benchmarks in these areas, I’m happy to do a quick demo for you anytime.  

If you want to dig deeper into practical tips and tactics for improving performance, join me at the FBR Summit in October. Programmed specifically for operations leaders and field support teams, it’s the best place to get the latest best practices and learn what other brands are doing to improve performance. Let me know if we will see you (or your Operations team) there! 

Get Peak Performance from Your Franchisees

How can you make an immediate and lasting impact on your franchisees’ success? Find out at the FBR Summit. The Summit is a two-day intensive, event created just for franchise operations leaders and their teams that directly support franchisees. Don’t miss it!

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