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Franchisee Feedback -- 2007 Satisfaction Ratings

Is investing in a franchise a wise decision? What do Franchisees think about their investment and the franchise industry in general?

According to the Franchise Satisfaction Index published in 2007 by the Franchise Business Review, a leading market research company in the franchise industry, most Franchisees are indeed happy with their decision about franchise ownership.

The firm conducted a survey of more than 25,000 franchise owners over the course of two years to measure the overall satisfaction levels of franchise business owners.

The survey based most questions on a five-point scale, with 1 the lowest rating and 5 the highest in satisfaction. Five specific areas were covered:

  • Training and Support

Franchisees were asked whether the initial training was adequate and whether ongoing training and support is provided to achieve business goals.

The general outcome was 3.4 (average) in overall satisfaction in this area.

Initial support received higher ratings (3.6) with ongoing and field support slightly lower.

Support for advertising and promotion scored lowest at 3.0, so for prospective Franchisees, this is a “hot spot” that should be carefully scrutinized and understood before signing a Franchise Agreement.

  • Systems

Respondents rated their operational systems in relation to how well the franchise is run and whether its systems make it competitive in the marketplace.

Overall, the Franchisees were happy with the products, services, and systems. The competitive factor rated a 3.9, with the majority of Franchisees viewing their operations as good against their competitors.

Products and Services were rated highly at 4.

Creativity and Innovation, a measure of how much the Franchisor experiments to improve the system, received 3.6, indicating willingness to adopt new systems to be more competitive.

Support averaged 3.4 in the systems category. The average satisfaction rating for systems was 3.7 on the 5-point scale.

  • Relationship

This is a crucial aspect of franchise satisfaction and success. And Franchisees gave it high marks, with an overall score of 4.1 for satisfaction with the franchise relationship.

Criteria used to measure this category were Knowledge and Support (3.9), Accessible and Responsive (3.9), Communications (3.8), Respect (4.1) and Honesty; and Ethics (4.4).

This is good news for prospective Franchisees looking to buy a franchise. When you are gathering information about the franchise, look for positive feedback in these areas from existing Franchisees.

If the Franchisees report low satisfaction for any of those factors, consider it a warning sign since the Franchisor is not meeting the industry average for Relationship satisfaction.

  • Financial Opportunity

Financial opportunity is the most compelling reason to buy a franchise, so this is the most pivotal aspect of franchise ownership satisfaction.

The average response was….. average. Franchisees rated the value they receive for fees paid at 3.5, and how the total investment matched their expectations, which scored 3.5 also.

Long-term growth expectations were good, with a 3.9 score indicating optimism about the future.

As to their current financial picture, Franchises rated their satisfaction on a four-point scale, with 1 being significantly below expectations, 2 slightly below, 3 meeting expectations, and 4 exceeding.

The average score was 3.1 meaning most Franchisees were meeting their franchise financial goals.

  • General Satisfaction

When asked about the overall opportunity of owning a franchise, the score was 3.7, slightly higher than average.

Most Franchisees were happy with their business. They also indicated they would make the same decision to invest if given the option to do so again knowing what they do as experienced Franchisees.

The response was 3.9, which indicates a good satisfaction level with their franchise businesses.

One in four said they would rethink their investment, with half the respondents emphatically positive about doing it again.

  • Summary

The results all point to overall satisfaction on the part of Franchisees with their business investments. Of course, that does not eliminate the need for any prospective franchise owner to do all the research footwork and due diligence before investing in a franchise. And part of that research is talking to Franchisees in the business. These survey results could help you conduct your own informal survey when talking with franchise investors. Ask them how they rate these areas of their business, and if their responses indicate less satisfaction than the survey results, find out why.

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