Franchisee recruitment is the cornerstone of any successful brand. It must be done right. It requires the right team, the right information, the right prospects, and the right follow-up. There must be a proven process in place that is followed and continually improved. But amazingly, year after year, franchise brands continue to fumble the fundamentals.
Whether it's providing incorrect or outdated information on a website or the lack of a quick (or any) telephone response, among other problems, many franchise development teams are still in dire need of improvement, according to this year's mystery shopping results.
Every franchise brand that registered to attend this year's Franchise Leadership & Development Conference (FLDC) by late July was mystery shopped by "qualified prospects" who phoned in and completed online applications. In total, 165 brands were evaluated and the results were, once again, a bit shaky.
Franchise Update Media's Therese Thilgen, along with "prospects" Art Coley, CEO at CGI, and Maureen DiStefano, franchise consultant, presented the survey results at the annual conference in Atlanta in late September. The other mystery shoppers and researchers were Jenny Langfeld, COO at CGI; Eric Stites, CEO of Franchise Business Review; Keith Gerson, president and chief client advocate at FranConnect; and Jeff Lefler, CEO of FranchiseGrade.com. Each brand was evaluated by telephone query, website response form, website best practices, social media, franchisee satisfaction, and FDD scoring.
This year we went directly to the researchers for their methodology and perspective on what they discovered in analyzing franchise recruitment procedures and systems, and how they presented themselves to prospects both online and on the phone. Here are their insights.
By Art Coley & Jenny Langfeld
The mission was simple. Franchise Update commissioned us to place calls to the 165 franchise brands registered for the Franchise Leadership & Development Conference. We were to pose as unqualified leads looking for information. Art "Dudley Pennington" and Jenny "Amy Pettit" divided up the list and began calling. Here's a look at the process used and the results.
Then gather up data and results and present findings.
"I'd like to speak to someone with ________ franchise. I'm going to visit the website to get a phone number."
The action was to find the phone number for inquiries to call when looking for franchising information. If it took more than three clicks on each of the prospective websites to find a phone number, that franchisor was immediately eliminated from the mystery shop list. We ended up with 87 brands to call. This means that 48 percent of the brands were eliminated because they either did not have a phone number on their website or it took more than three clicks to find it.
"Now that I have a phone number for ________ franchise, I'm going to call and either talk to someone or leave a message for a franchise representative to call me back."
Of the 165 brands, 87 (52%) got a call. We wanted to learn more about the brand. We connected live with 35 of the 87 brands (40%) on the initial call. We left messages with the other 52 brands asking for a call back so we could learn more. Twenty-eight of the 52 brands called back within 24 hours. If a brand called back after 24 hours, their file on the mystery shop was closed. During the first call with the brands 18 asked us for our name and email address, 7 asked for our time frame to get started, 10 qualified us financially, and 14 asked for our lead source. There was a lot of room for improvement here but the numbers were not very different from previous years.
"Great! ________ franchise called me back within 1 business day. I'm going to call back and request to speak with the person who returned my call."
Part III of our process included a series of follow-up calls to the 28 brands that placed a return call to a voicemail or request. We were able to connect live with six of those brands before the end of our mystery shop timeline.
As a result of our mystery shopping, we learned that many of the appointment setters and franchise salespersons are professional and upbeat. Many appointment setters did mini-Step 1 calls to pre-qualify a candidate, were positive in handling unavailable territory, and some even offered to meet personally.
We also learned that many of the people we spoke with were telling us features of their brand versus learning about us (the candidates); told us that "Salesperson A" would call back and then "Salesperson B" actually did, which caused confusion; that a live person (receptionist) and director didn't communicate; that a live person sent us to the website, simply telling us, "It's the process"; and that there were a lot of generic voicemails, often with no name or brand.
The brands that performed well during the mystery shopping did several key things. They asked for basic information about us such as name, email, phone, address, financials (how much we were looking to invest in a business), timeline, lead source, past experience, opening time frame, location, and more. They also presented the brand in a short, concise manner and did not dominate the conversation; they listened and responded to our answers. Overall, they were excited and enthusiastic about their brand. Many of the top 10 brands were interested in making the process about discovery and finding the right partners.
A few key takeaways from the mystery shopping include:
By Maureen DiStefano
I was charged with evaluating franchise brand website responsiveness for the mystery shopping survey. My online moniker was "Anne Costello." I evaluated 163 brands and for each that had an inquiry or web-based application I then moved through the following process:
Technological advances have made finding information online very simple and the process of requesting information about becoming a franchisee very easy. Today a response to web inquiries can be instantaneous. But the real memorable impressions come after the initial contact. This is when sales professionals must use resources effectively and efficiently to follow up on leads. Here's what great brands are doing right:
All the brands I contacted were extremely professional and respectful of my inquiry, regardless of size or if I even met the minimum requirements. However, there are some processes that may need to be updated:
Competition is fierce and talented and credible salespeople understand the available markets and understand being a genuine resource to future franchisee will attract the top future franchise partners. It is a strategy of persistence and genuine interest in being a brand resource that sets brands apart online, on the phone, or in person.
By Keith Gerson
The results from the 2016 website mystery shopping reinforce what many of us already know: while leading franchise brands may realize the need for a digital business strategy, we are not there yet as an industry. For example, we found that the majority of franchise brands have a unique website for franchise opportunities, but many brands still lack effective use of technology and are not capitalizing on social media to bolster engagement and unit growth.
In this year's website mystery shopping, 165 franchise brands participated. They were evaluated on business operations and marketing as they related to search engine optimization, website usability, and website content.
We shopped using various tools on the websites and scored the websites using 20 or more parameters that we organized in the following way.
An aggregation of the findings offers some insight into areas of strength and areas that require continued focus. FranConnect's observations are as follows:
As we have seen from this year's website mystery shopping, franchisors must empower their brands--and in the end, improve unit growth and success--with a better and more engaging website presence. This includes more learning opportunities and tools, as well as having mobile-friendly websites for our always-connected, always-changing business environment. Additionally, they need to incorporate a social marketing strategy to build local brand presence and consistency through social channels such as Facebook and LinkedIn.
Our recommendation is to conduct a self-audit of your site using the following as your quick-start guide.
1. Benchmark your current metrics
2. Determine your goal
This step, while it may seem simple, can often take the longest. Your goal must be clear, concise, and targeted.
3. Audit your brand message
4. Evaluate your audience
There is no silver bullet in the franchise development business, and building an engaging website is not a one-time task. It is an evolution that should continue to grow and change as a franchisor's brand and audience change. If franchisors can sit down and ask themselves these quick-start questions, the path to improving traffic and conversions will become clear.
By Eric Stites
New data from franchisee satisfaction research firm Franchise Business Review (FBR) shows a strong correlation between "engaged leadership" and higher franchisee performance. FBR looked at franchisee satisfaction data from 53 brands that attended the 2016 FLDC. When compared with industry benchmarks, the brands attending the FLDC significantly outperformed other brands.
A total of 9,353 franchisees participated in the study and represented more than 30,000 business units. They were asked more than 50 questions related to their business performance, satisfaction with their brand, and general business demographics. Satisfaction was measured across eight key areas: training and support, franchise system, leadership, financial opportunity, core values, franchisee community, self-evaluation (franchisee performance), and general overall satisfaction. Thirty-three of the survey questions were rated on a 100-point scale known as the Franchisee Satisfaction Index (FSI).
Data from the 53 FLDC brands was compared against FBR's benchmark data representing more than 350 franchise brands across all industry segments. Here are the findings:
The higher revenue, strong performance in eight key areas, and better performance overall that the 53 FLDC brands demonstrated compared against FBR's benchmark are a testament to their commitment to serving and engaging their franchisees, and to making their satisfaction and performance top priorities.
By Jeff Lefler
FranchiseGrade.com is proud to have played a key role in the selection of the STAR Award recipients at the recent FLDC.
We graded 167 franchise systems that participated, and provided a look behind the scenes to show how these franchises graded and how they compared with the entire franchise industry. Our grading evaluated each franchise in a number of areas including investment structure, ongoing fees, franchisee rights, franchise relations, system growth, system turnover, and Item 19 disclosure.
Our methodology consists of extracting data from Franchise Disclosure Documents (FDDs) and comparing franchise systems based on similar characteristics such as sector and investment range. For every franchise system, we reviewed multiple years of Item 19 disclosure, grading the level of disclosure each system provides. As an example, some franchise systems may provide system-wide average gross revenue, which is not as useful as a breakdown of revenue by quartiles. However, some franchise systems may only disclose data from 25 percent of their franchised locations, potentially skewing the revenue numbers to a limited number of franchisees.
In general, a disclosure with more data is helpful for a prospective franchisee to create a pro forma income statement and cash flow projections. The financial disclosure can be presented in the form of expense data, historical sales, outlet-by-outlet data, and other presentations that provide useful insights for a franchise investor.
The results of our grading indicates that the 167 franchise systems that participated in the 2016 FLDC represent top-performing franchise systems when measured against the overall franchise industry.
These results indicate that the FLDC franchise system attendees are successful, strong franchise systems focused on the most effective and correct ways to grow their franchise systems. It also reveals that successful franchise systems share certain attributes that have led to their sustained success, such as more transparency in Item 19 disclosures.
Franchise leaders that focus on their metrics and how they compare with their franchise sector can provide this information to prospective franchisees. This will validate the strength of their franchise system and draw a favorable distinction compared with their competitors. The franchisors attending the FLDC continue to seek ways to develop and grow their franchise system the right way by attending these conferences and participating in workshops designed to improve franchisee sales and system performance.
Website Mystery Shopping Results
66% provide unique starting points on franchise site (25% last year)
68% provide a process for learning (54% last year)
60% have video on the franchise site (40% last year)
59% have an investment chart--not properly qualifying? (46% last year)
49% have financials on the qualification form (44% last year)
74% of franchise sites are mobile friendly (52% last year)
40% do not provide franchisee testimonials
Social Mystery Shopping Results
64% had consistent branding on local pages on Facebook (38% last year)
23% communicate the franchise opportunity somewhere on their Facebook profile (30% last year)
20% had some level of activity in the past week on LinkedIn (28% last year)
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