The Top 5 Drivers of Franchise Performance [New Research]

Research reveals the five key ares that have the greatest impact on overall brand performance

Long-term success and profitability for franchise brands can be boiled down to two key factors: Franchisee satisfaction, or how well your franchise owners’ experiences match their expectations, and franchisee engagement, how connected and passionate franchisees feel about your brand. It’s these two things that affect every other indicator of success — from unit profitability and royalties to turnover and unit growth.

So how do franchisors achieve satisfaction and engagement with franchisees? Franchise Business Review’s most recent research revealed five key areas that have the greatest impact on franchisee satisfaction and overall brand performance, as you can see in the chart below. 

How (and Where) to Make the Biggest Impact

When we compare the franchise brands scoring in the top quartile for franchisee satisfaction against the brands in the bottom quartile, it’s clear where they are outperforming (and out-supporting) the rest. If you want to improve performance, the first step is to identify where franchisees’ expectations don’t match up with their experiences, and where you have opportunities to build trust and move from satisfied franchisees to fully engaged franchisees.

1. Marketing & Promotional Programs 

Are franchisees looking for marketing support that you don’t have plans to offer? It’s important to provide clarity on what they are asking for and WHY it’s not in the plan. A frequent example is, “we want national advertising.” That doesn’t always work for smaller brands. Can you show franchisees the investment it would take, or the number of locations needed to reach ROI for a national ad campaign to be considered? Showing them how you plan to scale can provide them with how or when this would make sense.

2. Innovation & Creativity 

We get it, you’re a burger joint and you aren’t looking to add smoothies to the menu. There are other ways the franchisees are looking to you to innovate to help them keep up with, or get ahead of, the competition. This could be how guests order or interact in the restaurants, how they pay, or what menus look like. Many brands were forced to innovate quickly when the pandemic hit, figuring out curbside pick-up and delivery options that previously wouldn’t have made sense for their model. Those that were able to quickly come up with and implement creative ideas and innovations were able to minimize the impact on their franchisees.

3. Effective Use of Technology

Technology is one of the most expensive, in terms of both time AND money, to tackle. If big projects are underway, it may be some time before the franchisees see or feel a positive change in their locations. Acknowledge the pain, and the solution with the system. Can you provide a time table of what is happening behind the scene so they can tell you are making progress towards the end goal that is further out?

4. System-Wide Communications

There are more opportunities and channels for communication today within franchise organizations. Email, texts, phone calls, Zoom, Slack… but more doesn’t always mean better. Frequency of communication, accessibility, understanding which messages have been seen and heard, and most important – are people responsive and helpful when needed – is essential to making progress. It’s a lot to consider, and each person in your organization has a different preference (and opinion) on all of this. Outlining expectations of who should be contacted for each issue and creating a common understanding of response times is a place to start getting everyone on the same page.

5. Training & Support Programs

Our research shows that nearly 1 in 5 new franchisees rate training and support “poor” or “average”. That’s 20% of new franchisees who are unimpressed right out of the gate when they should be raving about you. Franchisees just coming on board need different support than those that have been with you for 10+ years. Franchisees who have multiple locations (and are supporting managers to help run them) have different needs than your single-unit owner operator. Is your structure set up to help or meet your franchisees where and how they need it?

How Well Do Your Franchisees Rate You?

Do you know how your franchisees would rate you in these five areas? The only way to know is to conduct a survey  to understand the current satisfaction and engagement levels of the franchisees in your system – and how they compare to other franchise systems. 

These are areas that come up on validation calls with candidates, so if you don’t know, or it’s being rated low, it’s time for you to take action in measuring and improving these key areas of your business. 

Executive teams can use any survey tool to get feedback from their stakeholders. If you care enough to ask, you’re taking a step in the right direction. But if you’re using an internal survey or a generic survey tool like SurveyMonkey, you’re only getting a tiny piece of the picture. FBR’s survey, which consists of 33 carefully curated questions developed over the past 16 years, has been carefully designed to uncover the insights that have the greatest impact on franchise performance. 

Our sole focus is on franchising and we’ve worked with over 1,100 brands. We can compare your system against the overall franchise industry benchmark overall and against your segment within franchising. When a franchisee satisfaction evaluation wraps, we’ll take you through your results to dig into what we’re seeing, and offer ideas on how to share the data with your franchisees to be transparent and build trust, and how to set expectations and increase  alignment between the franchisees and franchisor on what comes next. 

Using Franchisee Satisfaction Data to Improve Performance

If you’re ready to start making in-roads on system performance, let’s talk about the current ways you get feedback from your franchisees, and how you USE it to build relationships and drive change in your organization. Schedule a free demo to see how Franchise Business Review measures franchisee satisfaction and engagement, and how you can use the data to positively impact system performance. 

Free 10-Minute Demo

What are your franchisees saying about your brand? It could be tanking your marketing and development efforts.

Now’s the time to find out. In 10 minutes, we’ll show you how to get:

• A confidential assessment of your brand
• Your FSI benchmark score, which shows where you rank
• The opportunity to be recognized as a Top Franchise award winner

Schedule a Demo