Satisfaction is Everything

How to build and maintain high franchisee satisfaction in any franchise system.

By Eric Stites

For franchisors looking to build a successful franchise system, there is one Golden Rule: treat your franchisees like gold. Your franchise owners are your number one customers. Service them well and your business will grow. Cut corners and your entire system will suffer. It sounds so simple, yet achieving and maintaining high levels of franchisee satisfaction can at times seem like an unattainable goal.

Of course, high satisfaction is attainable for almost any franchise that is committed to making it a priority.

Defining Satisfaction

Franchisee satisfaction can be defined as how well the daily experiences of your franchise owners compare with their expectations. When expectations are met or exceeded, resulting satisfaction will be high. When experiences fall short, satisfaction will follow.

Every interaction your franchisees have with your system results in a unique experience. These points of interaction, or “touchpoints,” literally encompass your whole company: the brand, promotional materials, UFOC, operating manuals, training and support systems, company culture, staff, and fellow franchisees. These touchpoints all play a significant role in setting expectations in the minds of candidates and existing franchise owners.

What is important to understand is that you, as the franchisor, have a direct impact on both sides of the equation. It is the primary responsibility of the franchisor to “manage” franchisee expectations through communication and over-deliver with the actual experience. These steps need to start very early in the relationship, well before candidates become franchise owners.

“Setting realistic expectations is critical,” says Budget Blinds CEO Chad Hallock. “I clearly articulate [to candidates] what it is that they are getting into. I walk them through all the negatives of business ownership and ask them ‘Is this new business and its ultimate outcome worth dedicating more than 100 percent of your life to?’”

Why Satisfaction Matters

There are four stages in the satisfaction cycle: expectations, experience, satisfaction and the final stage, behavior. High franchisee satisfaction is wonderful. It makes people feel warm and fuzzy inside and everyone sleeps better at night. But it is really the resulting behavior of satisfaction that is the “Holy Grail” that every franchisor seeks.

Top 10 Behaviors of Happy, Satisfied Franchisees

• Work harder
• Follow the system
• Make more money
• Easier to manage
• More loyal to the brand
• Bring good ideas to the table
• Create a marketing or public relations opportunity
• Validate better
• Refer more candidates
• Renew their franchise agreements

It is these resulting behaviors and their bottom line impact that create the indisputable link between high satisfaction and high profits. This is why franchisee satisfaction matters so much.

Measuring Satisfaction

Satisfaction is a moving target because your franchisee population and your system are constantly evolving, as well as the needs and expectations of your owners. With this in mind, there are five key steps to successfully measuring satisfaction:

1. Communication For any project to be successful in a franchise organization, communication is critical. Explain to franchisees up front why their satisfaction is important, how satisfaction will be measured, how the information will be collected and how the information will be used to help grow a stronger franchise system.

2. Third-party Using a third-party company to manage a franchisee satisfaction project has several key benefits. First, their survey expertise will save many hours designing and implementing a satisfaction survey. And as an independent third-party, it will achieve a much higher participation rate and franchisees will be likely to share more. Results from a third-party survey will also be more credible in the eyes of franchisees and candidates, and extremely useful in public relations and development efforts. Lastly, a third-party company can provide valuable benchmarking data that will allow you to track franchisee satisfaction over time, relative to both your industry and the franchising sector overall.

3. Touchpoints Survey questions should be targeted around your primary franchisee touchpoints such as: training and support, marketing, system questions, franchisee-franchisor relations, financial expectations, and overall satisfaction. Be sure to include a few custom questions specific to your system or industry segment, as well as a few open-ended questions that require a more detailed response. Don’t forget the most critical question, “How can we improve your franchise ownership experience?”

4. Share It is important to openly share the survey results with all of your franchise owners, and in many cases, with candidates. This will build great trust and show that you are openly working to build a stronger organization.

5. Monitor No matter how much daily contact you have with your franchisees, it is important to regularly and systematically measure their satisfaction. Surveys should be conducted annually and more often within high-growth systems. Keep in mind how your business cycle, seasonality and other factors impact satisfaction levels. Surveying subgroups of franchisees throughout the year may help balance these issues.

Understanding Satisfaction

Once your franchisees have been surveyed and their overall satisfaction plotted on a curve, an interesting picture will unfold. Generally speaking, there are three groups of franchise owners in every system: Group A - Brand Promoters, Group B - Brand Neutrals and Group C – Brand Busters.

Group A – Brand Promoter These are the top-performers and most satisfied franchisees. They are passionate about your brand and are fully committed to the long-term vision of the company. They are very active within your system and will likely generate the lion’s share of the royalties.

Group B – Brand Neutral These franchisees lack the fire and passion of your top performers. They will typically follow your system but not be fully engaged. In large numbers, they can drag a system down. Their satisfaction levels will be about average.

Group C – Brand Busters These owners buck the system and are a major drain on resources. They operate by their own rules, don’t fit in with the company culture and will be your worst performers and least satisfied owners. Even in moderate numbers, they can be the end of any franchise system.

When many franchisors think about their franchisee population and satisfaction levels, they envision a smooth bell curve with the bulk of franchisees falling somewhere in the middle. The reality is that these “satisfaction curves” come in many different shapes and sizes. Once you have plotted your overall satisfaction results, you will easily see where to focus your energies.

Taking Action

Franchisee satisfaction should be discussed in detail with your franchisee advisory council on a regular basis. If you don’t have one, create one on a regular basis. Together you should craft an action plan to address critical issues and always look for new ways to improve results. Every initiative should be clearly defined and measurable. Prioritize your projects by those with the greatest impact and the least resources required.

The obvious goal of every franchisor is to have as many Brand Promoters and as few Brand Busters as possible. You will want to focus your efforts on areas where you can create the largest gains, whenever possible moving franchisees from Group C to Group B, and from Group B to Group A.

Five Things You Can Do Today

While it is true that improving system-wide satisfaction can take many months and years, here are a few things you can start doing today that will have an immediate impact:

Franchisee Advisory Council If you don’t have a franchisee council, start forming one today. Your council should be part-elected (by geographic region) and part-appointed, with a good balance between newer and older, as well as smaller and larger franchisees. Meet at least quarterly and involve this group in all franchise-related decisions. Annual Convention and Regional Meetings No matter how small your system, it is never too early to start holding an annual meeting to bring franchisees together, share ideas and celebrate your business. As your system grows, smaller regional gatherings may become more effective and better attended, rather than one giant annual meeting.

Franchisee Awards Everyone loves receiving an award. Think of creative ways to pay tribute to franchisees throughout the year, especially under-performing ones. Publicize these awards across your system and the media at large.

Regional Peer Advisory Boards Have neighboring franchisees act as official advisors to each other. Small advisory boards of four to six owners should meet regularly to visit locations and review business performance and projections.

Satisfaction Survey You will be amazed at the positive feedback and change in morale you will see just from going through a satisfaction survey project. Having a formal process for franchisees to express their views and opinions is half the battle.

Maintaining Satisfaction Over the Long Haul It is the age-old problem in franchising: veteran franchisees perceive less and less value from the royalties they pay as they gain more and more experience with the business and industry. As they become less dependant on corporate for training, support and operations, it is imperative to deliver added value. There is always the brand that brings value but services for more mature franchise owners have to be about more than just the brand itself.

The Bottom Line

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.

Eric Stites is president of Franchise Business Review. He can be reached at 603-552-2747 or estites@franchisebusine