How franchisee satisfaction could signal the right opportunity for you

20/05/2018 18:00 | Start a business

Franchisee satisfaction


When you’re looking to buy a franchise, there’s an enormous number of things to think about. Amongst other things, potential franchisees must consider whether they can afford the franchise, whether they’re well suited to the industry, whether they’ll make enough money, and whether they’ll enjoy being a franchisee. They should also consider franchisee satisfaction. Here, we explore the concept of franchisee satisfaction and consider why it should influence your decisions.

What is franchisee satisfaction?

All businesses are interested in measuring customer satisfaction with their products and services, while a significant number of organisations have also begun to recognise employee satisfaction as an essential contributor to increased productivity and efficiency in the workplace. Both of these measurements are important in the context of franchises, too. However, for anyone hoping to start a franchised business, there's another vital metric to consider – franchisee satisfaction.

Like both of the metrics above, franchisee satisfaction is a relatively loose concept that can be difficult to measure. One way of looking at franchisee satisfaction is to view it as a means of comparing franchisee expectations to the reality of owning and managing a franchise unit. If the act of running a franchise meets or exceeds the expectations of the franchisee, we can say that the franchise benefits from high franchisee satisfaction. If the reality of the situation does not match up to expectations, the franchise suffers from low franchise satisfaction.

It’s important to remember that franchisee’s perceptions of the support and assistance they receive are uniquely individual. They depend on the franchisee's worldview and their understanding of what constitutes an adequate amount of support. This can make franchisee satisfaction a challenging concept to measure well.

Issues with customer satisfaction

What makes franchise satisfaction such a difficult concept to work with, is the fact that franchisees are likely to have wildly different expectations when they start their new business. If one franchisee signs the franchise agreement with incredibly unrealistic expectations, it’s almost inevitable that they’ll be disappointed. Likewise, if a franchisee signs the franchise agreement with no expectation of receiving assistance from the franchisor, they’re likely to be pleasantly surprised if they receive just the minimum of support.

Despite these problems with measuring franchisee satisfaction, it remains a useful tool for individuals trying to work out which are the best franchises to buy. In reality, most franchisees enter into a franchise contract with more accurate expectations than those expressed in the two examples mentioned above. This means that measurements of franchisee satisfaction will be more accurate and can tell us something useful about the nature of the franchisor/franchisee relationship in individual franchises.

What factors contribute to franchisee satisfaction?

When exploring the idea of franchisee satisfaction, it’s a good idea to take a look at the kind of things that influence a franchisee’s perspective. In other words, what is there to be satisfied or dissatisfied about?

The franchisor/franchisee relationship is an incredibly important factor in determining how successful individual franchise units will be. Franchisees buy into the franchise system having been made specific promises. If these commitments aren’t met by the franchisor, then franchise satisfaction is bound to be low. Examples of these commitments may include;

  • A business model that guarantees a certain level of profitability.
  • Ongoing support and training.
  • An open line of communication between franchise management staff and the franchisee.
  • An exclusive territory that contains a certain number of pre-existing customers.

While this list is by no means exhaustive, it provides a few examples of the kind of areas in which the reality of being a franchisee can either fall short or exceed franchisee expectations.

Why is franchisee satisfaction important?

On a basic level, franchisee satisfaction is an important metric because it provides some insight into how your franchisor/franchisee relationship will manifest itself and whether the franchise will deliver on its promises. However, there are many other reasons franchisee satisfaction is relevant, too;

  • Productivity and performance – Franchisees that are satisfied in their relationship with a franchisor are likely to work harder and increase their productivity and performance. In turn, this is likely to result in higher profits and a higher likelihood of business success.
  • Commitment to the franchise – If a franchisee is content with their position in the organisation and the amount of support they receive, they’re much more likely to want to commit to the franchise for the long term.
  • Recommendations – A franchisee that’s satisfied with the franchisor is much more likely to recommend the franchise to other prospective franchisees. This allows the franchise network to expand and grow, benefitting all franchisees in the process.
  • Focus – If a franchisee is not satisfied with their position, they’re likely to spend far more time complaining to the franchisor and trying to resolve issues, than they’ll spend on growing and developing their own business. Successful franchises are those in which the franchisee feels that they have sufficient support to focus solely on achieving greater profits and improved performance.

How do you conduct your own franchisee satisfaction research?

While there are a number of online resources that attempt to measure franchisee satisfaction and many franchises conduct internal satisfaction surveys, you can also perform your own research, too. When speaking to the existing franchisee, think about the following questions;

  • Given the opportunity to turn back the clock, would you still invest in the franchise?
  • How long do you plan on staying a franchisee?
  • Do you trust the franchisor to deliver on their commitments?
  • Does the franchisor provide you with the tools, support, and training you need to succeed?
  • Are the franchise fees representative of the franchise’s potential profitability?
  • Are you earning more or less than you expected when you first signed up?

Conclusion

Franchisee satisfaction is an incredibly important means of measuring how the reality of working with a particular franchisor measures up to expectations. It offers invaluable insights into how the franchisor interacts with franchisees and whether they deliver on everything they promise in their sales pitch. Though it’s by no means an entirely accurate metric, it will generally give prospective franchisees a better understanding of how the franchise functions. In turn, this allows them to make a more informed decision about which franchise they want to work with.

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