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Franchize Consultants

New Zealand Franchising Consultants Firm

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Are You Measuring and Managing Franchisee Satisfaction?

February 10, 2017 by Franchize Consultants

Measuring franchisee satisfaction is important, as franchisee satisfaction is a powerful concept in franchising. Positive levels of franchisee satisfaction can contribute to strong network growth and development. Meanwhile, poor satisfaction levels have the potential to destroy value and send a franchise system into a slippery downward spiral.

If you’re a franchisor you should monitor franchisee satisfaction. Franchisee satisfaction dimensions should make up some of your most important system key performance indicators. And if you’re a prospective franchisee, you should know how current franchisees feel and what their intentions might be.  They matter.

What is franchisee satisfaction?

Franchisee satisfaction compares franchisee expectations with the performance they receive. There can be an overall measure of franchisee satisfaction, but there also are many dimensions of franchisee satisfaction. We take a Life Cycle view that gauges franchisees satisfaction right through the franchise relationship, from recruitment and onboarding to the franchise structure, ongoing and field support, leadership, marketing, and, financial outcomes. Each area has multiple dimensions, and our own Franchisee Satisfaction tool has more than 30 different measures.

Why measuring franchisee satisfaction is important?

Franchisee satisfaction is a crucial performance indicator that should be known by a range of stakeholders. Franchisee satisfaction levels especially matter because they are connected with outcomes that drive future franchise system performance. Key examples include the intention of existing franchisees to stay within the franchise system (franchisee tenure), the likelihood existing franchisees would recommend the franchise to others, and the degree to which existing franchisees may want to purchase additional franchises. These are all powerful drivers of future network size, the quality of future franchisees, and performance.

What does good and bad franchisee satisfaction look like?

Taking a positive viewpoint, highly satisfied franchisees agree with the following kinds of statements that, in turn, lead to franchisees that want to stay grow and recommend the franchise to others.

Our own Franchize Consultants Franchisee Satisfaction Benchmark is an index of many individual franchise company metrics. In an extremely positive situation, for example, all franchisees would Agree or Strongly Agree that the financial opportunity aligned with their original expectations. By contrast, the opposite can be true, as it was for the franchisees of one International Franchise that entered NZ and subsequently failed. As an outcome, by example, three quarters of franchisee may intend to remain the next five years, or, by contrast, leave. Satisfaction levels and their associated outcomes matter.

What factors drive franchisee satisfaction?

Taking the same Life Cycle approach mentioned earlier, there are many areas that go on to impact levels of franchisee satisfaction. Furthermore, individual franchisee responses to the same questions can change overtime. But broadly, the franchise structure, franchisee recruitment process, quality of franchise system management and leadership, and, financial performance, are all drivers of franchisee satisfaction. Poor franchisee satisfaction, or declining franchisee satisfaction, is often an indicator that something isn’t quite right. In many cases, some franchise systems might benefit from a comprehensive Franchise Review.

Who measures franchisee satisfaction?

Specialist consulting companies like Franchize Consultants are experienced researching, measuring, assessing and improving franchisee satisfaction. Ideally, an independent organisation will complete a franchisee satisfaction survey and promise existing franchisee confidentiality on their individual responses. That provides franchisees confidence in being open, and, improves their ability to provide insightful and useful contextual feedback.

Good franchisors measure franchisee satisfaction on a regular basis, ideally annually.

How would you stack up and what could you learn? Compare yourself to the Franchize Consultants Franchisee Satisfaction Benchmark.

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About Franchize Consultants

New Zealand’s largest and most experienced franchising consultancy providing specialist advice and assistance to prospective and existing franchising and licensing networks. Founded in 1989, Franchize Consultants provides consulting, training, mentoring and research services to leading local and international franchising companies.

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