The Importance of Franchisee Satisfaction and Engagement

Franchisee satisfaction and engagement may seem like soft, subjective issues, but they are critical tools for building a healthy system. Do it well and your brand thrives. Do it poorly and your brand perishes.

Satisfaction vs. Engagement

Franchisee satisfaction isn’t about making people feel good. It’s about achieving a franchise company’s strategic and financial goals. Satisfaction is dependent on how franchise owners’ experiences compare with their expectations.

In the most recent Annual Franchisee Satisfaction Study, Franchise Business Review found that brands with high franchisee satisfaction drastically outperform brands with low satisfaction on every key performance metric.

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Engaged franchisees participate are passionate about the business and feel a deep connection to the franchise. They see themselves as partners and actively take ownership for the success of the brand.

The risks of leaving franchisees unengaged or actively disengaged are recurring conflicts, disappointing performance, and even erosion of the brand. Worse yet is unengaged or actively disengaged franchisees giving potential franchise buyers bad references.

The Economic Value

Franchisee satisfaction and engagement has a direct and measurable impact on system profitability. Improving satisfaction and engagement has economic benefits:

  • Reduces costs
  • Increases operational effectiveness
  • More successful performance
  • More royalties
  • More recommendations
  • More franchisees

Savvy franchise leaders know that It’s not okay to go with your gut when it comes to franchisee relations. Having a clear understanding of your franchisees’ experiences and expectations is critical to your success. That can only be achieved by collecting detailed, objective data on your system, measuring it against comparable industry benchmarks and indexes, and making changes to produce continuous system improvements.

 

“With Franchise Business Review, we are able to benchmark Snap-on against our past performance and hundreds of other systems as well. With the use of rapid continuous improvement, Franchise Business Review helps us improve our system.”

 

Barrie Young, President, Sales & Franchising, Snap-on Tools