FRANCHISE RELATIONSHIPS INSTITUTE
BY GREG NATHAN
Over the past 15 years the team at the Franchise Relationships Institute have been using in-depth surveys on thousands of franchisees to better understand what a franchisee wants from their franchisor. The tool we use is called The Franchise Effectiveness Survey and it measures and benchmarks franchisee satisfaction.
This is an important topic, especially for franchisors who want to expand their networks. A franchisor that wants good quality candidates inquiring about joining their franchise system needs to also ensure their existing franchisees are satisfied with their decision to join their group!
This article provides some very practical tips on what we have learned from our research.
Not surprisingly franchisees want their franchisor to negotiate deals with suppliers that will reduce their operating costs and to provide ideas and systems for enhancing productivity.
They also want regular access to useful and relevant business information that will help them grow their business and stay in control of their financial position. A benchmarking program that shares results on agreed key performance indicators is a great start.
While franchisors are often very effective in providing initial training, franchisees want more ongoing training to improve their skills in the areas of people management, business planning, goal setting and marketing. This is especially true of more mature franchisees who tend to become skeptical and dissatisfied if their evolving needs are not met.
Marketing is a broad term so let’s be more specific. Two important factors to franchisees are advertising that attracts new customers and a strong brand. In fact many franchisees buy a franchise on the strength of the brand.
Franchisees also want a well thought out marketing strategy that will give them an edge in their local market and help with the skills to convert enquiries into sales. And they expect ongoing innovation that will excite customer interest.
Finally they value unique promotional tools such as point of sale signage and catalogues – things they would not be able to source if they were on their own.
Franchisees often refer to the sense of security they get from being part of a united, cohesive group. In particular they value the opportunity to interact with other franchisees at meetings and conferences. However they frequently refer to a desire for meetings to be more interactive.
They also say they want more opportunity to have their ideas, questions and concerns heard by their franchisor through open forums and discussions.
The introduction of operational changes without adequate consultation is particularly frustrating and puzzling to franchisees who feel they have more insight about operational matters than their franchisor.
One theme to emerge from our research is that franchisors often have clear goals for the organisation, but fail to provide franchisees with a sense of where they fit into the big picture. The result is that franchisees can feel threatened rather than excited by a company’s expansion plans.
Consistent with other international research on what people want from their leaders, franchisees expect the franchisor team first and foremost to be honest and fair in their business dealings. A competent management team is also seen as essential.
Loyalty from a franchisor is important. Having supported the franchise system over a period of years they expect this to be reciprocated. For instance they may become resentful if they think the company has an unbalanced emphasis on attracting new people while ignoring the needs of longer standing franchisees.
Most people dislike conflict. In fact unresolved conflict has emerged in our research as a major reason why people want to sell their franchise.
Yet some conflict is inevitable at times in the franchise relationship. Furthermore we have found that in a mature franchise system, at any time there is likely to be a certain percentage of franchisees who feel they have a serious current or impending disagreement with their franchisor. This is normal.
While this does not mean these people are in litigation or formal disputation, it does highlight the need for robust conflict resolution processes to be an integral part of every franchise system. It also highlights the need for members of the franchisor team to be able to have conversations with franchisees in which difficult issues can be discussed and resolved in a mature and respectful manner.
Franchisee advocates are vital for growing a franchise system. Our research suggests that a strong predictor of whether a franchisee will recommend a franchise to others is whether he or she feels the franchisor is genuinely concerned about his or her success.
Indeed, franchisees frequently say they would love to have their franchisor call, just to see how they are going, without any ulterior motive.
On a related matter, quick response times to calls and emails are frequently rated by franchisees as vital.
Sometimes we assume that because we are in business, everything’s about the money. We may forget that franchisees are people with emotions and feelings — not contracts or numbers. And while we might not like to admit it, most behavior is influenced by emotions not by logic.
While return on investment is one of the drivers of franchisee satisfaction and whether a franchisee will recommend a franchise, we have found that there are other issues such as feeling cared for, optimism for the future, confidence in top leadership and having positive relationships with other people in the franchise system that are also important.
In conclusion while a profitable franchisee is no doubt more likely to be a happier franchisee, franchisors should not underestimate the power of relationships and good old fashioned courtesy and respect in building a prosperous, happy and vibrant franchise system.
Our web site contains many tools and materials to help you along on this journey. We hope you use them wisely.