How Franchisors Can Use Measurement and Evaluation to Take Franchisee Satisfaction to the Next Level

Conversations in the franchising industry often revolve around customer satisfaction. However, there’s another group of people who need to be happy in order for franchises to be successful: local business owners.

In an article for the International Franchise Association (IFA), Eric Stites, president of Franchise Business Review, said, “Your franchise owners are your number one customers. Service them well and your business will grow. Cut corners and your entire system will suffer.”

In order to ensure that franchisees are satisfied with their business relationships, it’s essential for brands to measure and evaluate their overall attitude toward their corporate counterparts. That means tracking current performance and even the goals that local owners have for future expansion and growth.

One of the most important tools for franchisors when evaluating their local owners’ satisfaction is also often the most overlooked. Brands’ Item 20s, which can be found in every franchise disclosure document, give franchisors the ability to see if their franchisees are sticking with the brand or avoiding selling their stores to other owners to move on to other ventures.

“Healthy franchise systems typically see transfers happening any time after two years. That shows owners are selling their businesses because they’re seeing a return on their investment,” said Dave Wells, director of franchising for Sport Clips*. “It’s also critical to note whether or not franchises are being transferred to existing owners.”

Once franchisors have an idea of whether or not their existing base of franchisees are satisfied, they’ll be able to determine where to go next. Through franchisee surveys, third party reviews and general employee feedback, brands can pinpoint both successful practices that make owners likely to expand and protocols that franchisees would prefer not to deal with.

That heightened awareness of how franchisees view their businesses enables companies to elevate their brands to the next level. At the end of the day, franchisors are only as successful as the team they surround themselves with. According to the IFA, measuring that success only involves a handful of easy initiatives that ultimately make all the difference.

“In the end, building and maintaining high levels of owner satisfaction within your franchise system boils down to four simple steps: communicate openly, involve franchisees in all major decisions, take massive and direct action to address issues and treat your franchisee with respect,” said Stites.