“When I started in this business my franchisor treated me like royalty — now I am treated like royalties!”
This comment from a franchisee sums up the challenge facing franchisors who are striving to attract new franchisees while also maintaining a team of happy campers.
Franchisors need to seriously consider this issue of franchisee satisfaction if they expect existing franchisees to recommend their franchise system to other people.
Of course, maintaining constructive relationships with franchisees is a lot easier to talk about than it is to put into practice. Indeed if you are a franchisor, this is possibly an ongoing challenge. There are six common reasons for this.
Most franchisors will have experienced problems with individual or groups of franchisees due to one or more of these areas. We have found that as a franchisor management team becomes more perceptive of these inevitable challenges they also become more capable of successfully managing them.
A good way to tackle this challenge is by applying the principle, “If you can’t measure it you can’t manage it”. In other words, measuring the state of your franchise relationships is good business practice. We would suggest a thorough survey at least every two years would be a good idea.
There are three common myths that deter franchisors from embarking on this journey.
Myth 1 – “There are more important things to focus on”. We have found that franchise systems that are plagued by poor relationships and do not face up to this challenge are not commercially sustainable. The cost of litigation, the distractions, the stress on the parties and the decline in customer focus inevitably takes it toll.
Myth 2 – “This stuff is too difficult to measure”. The fact is attitudes and feelings can be measured in a reasonably objective manner. This can be done by creating a forum in which people can give you feedback, either in the form of a survey, an interview or a focus group. What is essential of course is to ask the right questions and to listen to the answers with an open mind.
Myth 3 – “Asking them what they feel will just stir them up”. While seeking franchisee feedback can be challenging, it sends the right messages to franchisees that the franchisor is interested in their views. This in itself can prove to be a positive trust building initiative, especially if the feedback is acknowledged and the process is professionally managed.
There are several ways to discover what franchisees want. We can interview them individually or in groups and ask them questions about what they like and dislike about the franchise system.
We can also ask them to complete a survey of carefully worded questions. To gain greater honesty it is preferable that the responses are anonymous. The use of an external consultant can ensure confidentiality.
There are two types of questions typically used in franchisee surveys. The first are open-ended questions such as:
The other type of questions use rating scales, which enable responses to be quantified. Results can then statistically be analysed and compared with industry benchmarks. For instance, one question we ask franchisees is, if they had a choice, would they buy the franchise again. The industry benchmark in our database for a positive response is currently 72%.
At the Franchise Relationships Institute we use open ended questions and rating scales, as both approaches have unique benefits. We also ask franchisees to rate both the importance of specific services provided by their franchisor and how effectively these services are delivered. This enables a franchisor to distinguish high priority services from “nice to haves” and to determine any significant gaps in how effectively the most important services are being delivered.
We have been researching the franchise relationship for over 15 years. Based on this work we have developed a sophisticated franchisee survey for measuring and benchmarking the health of a franchise network’s culture and feeding back this information in a constructive and useful manner. We call this The Franchise Effectiveness Survey and we would be happy to talk further with you about how your franchise system could use this tool to improve its franchise relationships.