5 reasons to survey franchisees

By Ian Krawitz | 02 May 2019 View comments

The support office of a franchise is typically under resourced and stretched. In a constant state of flux and deadlines, why should a franchisor take the time to draw breath and make the investment to survey franchisees?

In this article the team at Inside Franchise Business have asked me from my experience of leading 600+ franchisee satisfaction surveys for over 100 franchise brands, what I see as the top five reasons to survey franchisees. The article will not go into the mechanics of conducting a survey. Rather this article addresses the reasons you should strongly consider regularly surveying your franchisees.

Top 5 reasons to survey franchisees

Clear and present danger

1. No more unilateral changes

You will need to overcome challenges regarding unilateral changes raised by the parliamentary inquiry into franchising.

In the March 2019 report, Recommendation 9.7:

9.75 The committee recommends that the Australian Government amend the Franchising Code of Conduct to require that where any franchise agreement provides for what would otherwise be unilateral variation to the terms of the agreement, that such amendment can only be made with the agreement of the majority of franchisees within the same franchise system or representatives elected by a majority of franchisees within the same franchise system.

Franchisee surveys enable you to gauge and improve franchisee satisfaction. Without the ability to measure and improve satisfaction it is extremely hard to build a strong relationship with franchisees. Without happy franchisees you simply won’t get a majority of franchisees or their elected representatives agreeing to changes in your franchise agreement and by connection your operations manual.

Simply put you will frustratingly remain at an impasse on important changes you want to implement.

2. Make no mistake, we are in a storm

Many franchisors are swimming against a media tide which has primed their current franchisees to question whether franchising as a model stacks up.

Priming is a phenomenon that occurs when a population is exposed to a message over and over again. In the general media landscape the narrative for the last couple of years has been firmly set to point out the failings in franchise models and franchisors, which in many individual cases have been warranted, and there is always room to improve even for the very best.

However, this constant repetition of a similar message has led franchisees far and wide (well beyond systems who have been exposed by investigative journalism) to think that the model is broken.

For more than 12 years we have surveyed our clients’ franchisees every six to 12 months tracking key metrics and encouraging open ended text feedback.

In June/July 2018 through our industry wide text analytics we noticed a shift in tone, which has been reinforced in March/April 2019.

We have seen a clear change in sentiment, where once happy franchisees, who may have reflected upon what they could do differently themselves are quick, in open-ended comments, to say that the business model is broken.

With this overarching sentiment clearly bubbling at the surface, a structured objective franchisee survey is one of the only ways to cut through and uncover specifically what franchisees aren’t happy with and importantly what they are happy with. This enables you to get a clear picture on sentiment and where to target improvements and resources rather than a less nuanced view that is only focused on “the broken system”.

Universal truths

3. Acting on the loudest voice or the collective is your choice

Without a franchisee survey you rely on one to one conversations which are often coloured by franchisees’ passionate raw emotion. Let’s not forget franchisees have their houses and their families’ livelihoods on the line, and the voice who shouts loudest is often the one that is listened to.

We have a client, who hadn’t done a franchisee survey for over five years. A new CEO came in and was told by senior management that franchisees are generally unhappy.

The new CEO thought it premature to survey franchisees preferring to implement a new strategy and bring in new personnel to turn things around first. The CEO also embarked on a trip to sit one on one with close to 100 franchisees and hear their issues. Whilst commendable and highly recommended for engaging with franchisees, this approach in isolation led the new CEO astray. On this listening trip many franchisees just talked about the negative and not the positives of the franchise. A very small group of vocal franchisees banded together to push a particular view point and in addition everyone seemed to have different issues. This all made it extremely hard to pinpoint the best path forward.

Twelve months further into the job the CEO commissioned a franchisee survey. The results showed the business would have benefited from seeking objective feedback earlier. In fact the survey revealed the most vocal groups of franchisees were in fact some of the happiest. The survey also showed the step-by-step path to improve franchisee satisfaction was far simpler than imagined.

Put simply surveying enables you to get truthful collective feedback and formulate a clear action plan.

4. Should I drive my car with my eyes open or closed?

Making strategic and tactical resourcing decisions and from a personnel point of view promotions and bonus decisions without data is like driving with your eyes closed.

We have seen first-hand how data on franchisee satisfaction gives senior leaders visibility to the issues in their system. It also shows clearly which departments, which geographic regions and which initiatives are or aren’t working. This means rather than stabbing in the dark or having lengthy internal debates about the cause of general dissatisfaction, an effective course of action can be taken.

Data either helps to support your gut instinct or to highlight issues you were not aware of. Whether you are looking at a change in tactics, providing further training for support office team members, investing funds in an area or making a change in personnel, data on franchisee satisfaction makes for better, timelier, decision making.

5. Forget the troubles of the franchise industry, your survival is at stake

The very survival of your brand and your whole franchise system depends on having satisfied, engaged franchisees. Without satisfied franchisees, you cannot lead franchisees to follow your strategic direction.

I have seen time and time again, where there is a break in the franchisee/franchisor relationship, consumer driven demands, which should be implemented system wide in three to six months, can take three to six years to get network buy in. History has shown waiting this length of time is too long, competitors will have taken market share and the brand offering will have lost relevance, the relationship with franchisees will have soured such that locations will close and it will be extremely difficult to be able to attract new franchisees.

On the flip side I have seen clients who survey their franchisees regularly, making continual adjustments to keep franchisees happy. Whilst individual circumstances are always different, these clients have experienced strong single to double digit comparative revenue growth year on year and have also continued to grow their number of franchisees.

Most franchisors review their financials, daily, weekly or monthly, but most don’t give the same importance to a keep a pulse on their franchisee’s satisfaction. With no continuous objective measure of one of the most important aspects that will ensure long term sustainability for a business, franchisors put their very survival at risk.

Ian Krawitz is the head of intelligence and founder of 10 THOUSAND FEET Strategic Research and Topfranchise.com.au