Why Franchisee Satisfaction Matters

Franchisee satisfaction is important for everyone in franchising – franchisors, franchisees, potential franchisees and staff alike. Franchisee satisfaction, like customer satisfaction or job satisfaction, is connected with outcomes that really matter to the culture, long-term health and sustainability of a franchise system.

‘At Franchize Consultants, we report on more than 40 different franchisee satisfaction measures,’ says managing director Dr Callum Floyd. ‘Here are five reasons why measuring and working on franchisee satisfaction is important.’

1. Satisfied franchisees recommend their franchise to others. This is important for a franchisor that wants to grow a franchise network and attract high quality franchisees. It is also valuable to established franchisees, as it helps maintain the resale value and exit potential for their businesses.
2. Satisfied franchisees would purchase the franchise again. This is an important validation for potential franchisees, but also important with multi-unit franchise networks because satisfied franchisees are more likely to want to buy second and subsequent units. Some companies, like McDonald’s in New Zealand, for example, have individual franchisees with more than 10 franchises.
3. Satisfied franchisees keep their businesses longer. Franchisee tenure is an important concept in franchising, with great franchisees staying longer before selling. This helps drive franchise system size (as new franchisees take on new territories rather than existing ones), unit-performance and franchise system management efficiency (as franchisees are more experienced). In some companies we have worked with, even after 10-15 years, very few franchises have ever been re-sold.
4. Satisfied franchisees help keep better franchisee-franchisor relations. There is good evidence that high levels of franchisee satisfaction are associated with both more positive franchisee-franchisor relations and lower levels of conflict. These factors are important for the culture of the franchise system, its performance focus and the ability to innovate and adapt to a changing world.
5. Satisfied franchisees are more likely to be associated with higher levels of performance. Franchisee performance is vital as a driver of both franchisee and franchisor returns. Put simply, the happier a franchisee is, the more likely they are to focus on advancing their business than critiquing their franchise.

Good franchisors measure  franchisee satisfaction

The best franchisors  – including many of the winners in the Westpac New Zealand Franchise Awards – carry out regular and independent surveys of franchisee satisfaction to check their own performance. Franchize Consultants undertake regular surveys for a number of franchise companies, and operate a survey instrument that can provide results against a New Zealand franchising benchmark.

Callum says, ‘Serious franchisors make franchisee satisfaction one of their most important annual objectives. Great franchises make franchisee satisfaction a key result area and look forward to what insights a regular and independent franchisee satisfaction survey can bring.

Contact us to find out more about the benefits of surveying your franchisees.’   

See this advertorial on page 37 of Franchise New Zealand magazine Year 31 Issue 1

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