Five things franchisees want from their franchisor
For a relationship to be healthy both franchisor and franchisee must feel their needs are being met. Listed below are five things that franchisees want from a franchisor, based on our research. The more a franchisor can deliver on these — the healthier their franchise relationships are likely to be.
1. Tools and processes that drive profitability
Anything a franchisor can do to help a franchisee save money, drive greater productivity or increase their sales will be enthusiastically received. At present franchisee satisfaction with their financial performance is on the low side with only 63% agreeing that their business is a financial success. Current sales declines and pressure on rents, wages and costs of goods is further squeezing franchisee profit margins. The better franchisors are currently exploring innovative ways to help franchisees protect their margins. This will also help these franchisors with their future expansion programs as multiple regression analysis of our franchisee satisfaction data shows that the biggest predictor of whether a franchisee will recommend their franchise system to a prospective franchisee is their level of satisfaction with their financial performance.
2. Marketing support that drives brand awareness and customer enquiry
When asked to name the three best things about their franchise system, most franchisees mention the brand. However, while 76% agree their franchise system has a well recognised brand, franchisees are not as enthusiastic about the effectiveness of tactical marketing programs for driving customers to their business. Indeed only 58% are satisfied with this aspect of their franchisor's marketing. The real problem here is not the quality of the marketing but how effectively franchisees are implementing these programs. The opportunity here is for franchisor marketing teams to engage more effectively with their franchisees at the local level by getting out into the field and partnering more closely with the operations team. Our research suggests that companies that do this enjoy significantly higher satisfaction ratings in the marketing area.
3. Leadership that is competent, trustworthy, committed and visionary
Franchisors tend to perform quite well in most of these areas. For instance 76% of franchisees believe their franchisor is committed to the long-term success of the business and 78% agree their franchisor treats them fairly. However franchisors tend to fall down in articulating their vision for the future with only 60% of franchisees saying they understand the long-term goals and direction of their franchise system. Leadership that gives franchisees heart is particularly important in tough times. Franchisors need to explain how they intend to support their franchisees and share specific strategies for protecting market share, boosting sales and building customer loyalty. We have found that this is best communicated face to face through road shows, regional meetings and conferences.
4. To feel respected and able to exchange ideas
Many franchisees in our research refer to the satisfaction they feel from being part of their network. In particular they say they most value interacting with and learning from other franchisees at meetings and conferences. Yet only 62% feel they have adequate opportunity to exchange ideas with other franchisees. They also frequently refer to their need to be listened to. However only 59% feel their franchisor respects their opinions suggesting a considerable number are not feeling heard. There are many small group processes that provide franchisees with the opportunity to participate more actively in meetings and conferences. Not only do these help to tap into the collective intelligence of the group, they also give all franchisees a voice, including the quieter people. We have found that these interactive processes significantly boost franchisee satisfaction.
5. Concern for their success with relevant, responsive support
We often hear franchisees saying they wish a franchisor representative would phone them to see how they are going. Consider that just 64% of franchisees believe their franchisor is genuinely concerned about their success and only 62% believe franchisor management make an effort to understand what they need to be successful. When rating the services provided by their franchisor, a prompt response to phone calls and emails is usually rated near the top for importance but is usually rated significantly lower for effectiveness. Franchisors in support offices must remember that the operational decision-making cycle of a franchisee is a lot faster than the strategic decision making cycle of a franchisor. Getting out regularly to work in the field is highly recommended as a way of staying in touch with the needs of the people at the coal face.
