Franchise Update Magazine Issue IV, 2014

Grow Market Lead Mystery Shoppers apps surged 41.6 percent in the third quarter compared with last year, and leads to franchise development teams grew 35.6 percent year over year. Particularly surprising was that the “August doldrums” never came this year—franchise development leads increased every quarter. We believe this is a positive leading indicator for the economy in general. Despite challenges, small-business investors are ready to put the recession behind them. Clearly, this is an exploding area of development. What do you recommend that franchisors/development teams change or do differently? Developing mobile websites and apps is becoming increasingly complicated. The number of different devices, screen sizes, and operating systems is expanding at a crazy rate. We recommend that franchisors test their websites for the most popular smartphones and tablets, and make sure their marketing partners are ahead of the curve for the latest devices. Franchisee Satisfaction Michelle Rowan, Franchise Business Review T o gauge franchisee satisfaction, Franchise Business Review surveyed 65 companies representing 15,571 business units. The survey, completed by 5,974 franchisees, consisted of 50 questions related to business performance, satisfaction with their brand, and general business demographics. Michelle Rowan, president of Franchise Business Review, oversaw the research. What surprised you most about your research findings? I was surprised that the group saw lower satisfaction than our averages, and that satisfaction dropped compared with last year. These are brands that care about their systems, or they wouldn’t be investing in attending the Leadership & Development Conference. What are franchisors/development teams doing well? The companies at the top of our category for the franchisee satisfaction awards at the STAR Awards overlapped with those responding well to candidates and receiving other STAR Awards. The strong brands and teams get that establishing that strong relationship and setting expectations up front leads to happier franchisees and a stronger system. What are franchisors/development teams doing poorly? In the case of franchisors that do not have strong franchisee satisfaction, I am surprised at the amount of money they spend on franchise portals for leads, trade shows, and other efforts to drive franchise growth. f franchisees are I not happy and validating well, it is wasted money. Last year, you recommended that franchisors continue to set expectations up front in the sales process. 48 Franchiseupdate ISS U E IV, 2 0 1 4 Did you see any change this year? Unfortunately no, we are seeing lower scores this year. This leads us to believe there could be a disconnect in what the management team thinks their franchisees are feeling and saying, or that the C-level leaders at the top have bought in, but those touching the franchisees quite possibly are not delivering. Either way, there should be an alignment at the corporate level and a buy-in from everyone involved, including the franchisees. Based on your research, what would you recommend that franchisors/development teams change or do differently? I think all brands hoping to see growth and stronger brands need to make sure the operations and development teams are aligned. This can be done by tying goals and compensation to each other. Set clear expectations and deliver from the top down. I also think it’s important for brands to “check their gut.” They can no longer claim they know what their franchisees are thinking. Either they know satisfaction is dropping and they will address the issues and relationship to strengthen franchisee validation before they continue pushing growth, or they need to make sure their franchisee’s perceptions are heard. Franchisors acknowledge that their best, and least expensive, source of leads is referrals from their own systems, so why not start by making sure they are happy, making money, and happy to validate the brand with potential buyers? Social Media Jon Carlston, Process Peak J on Carlston, vice president of social media for franchise development solutions firm Process Peak, studied how well franchises are using their online presence to grow their brand and manage their reputation. Questions and research focused on website effectiveness, basic search engine optimization features, site usability, and key content. The survey also analyzed the use of social networks such as Google+, LinkedIn, YouTube, Twitter, and Facebook. The level of engagement of the brand and its followers and fans, as well as what features were used on social channels, was also part of the exploration process. What were the key findings and results of your research? Considering that the percentage of franchises with mobile-friendly sites doubled in comparison with last year’s results, it appears that this was the main focus in 2014. However, from a local standpoint, franchisee microsites held steady with around 60 percent, with little to no improvement. Did you change your approach or look at new or different issues? The approach did not change, as we are focused only on the fundamentals that all brands should

Franchise Update Magazine Issue IV, 2014 | Page 50