2019 AFDR Highlights: Franchisors Exceeding their Goals

This is the eighth in an ongoing series of highlights from the 2019 Annual Franchise Development Report (AFDR). The 2019 AFDR, unveiled at the 20th annual Franchise Leadership & Development Conference (FLDC), is based on responses from 109 franchisors representing 34,058 units (26,838 franchised and 7,220 company-owned).

Participants in the survey consisted of franchisors that completed an extensive online questionnaire. Responses were aggregated and analyzed to produce a detailed look into the recruitment and development practices, budgets, and strategies of a wide cross-section of franchisors. The data and accompanying commentary and analysis provide the basis of the 2019 AFDR. Ordering information is below. (Conference attendees received a complimentary copy.)

• Cost per lead. Unlike 2017, where brands exceeding their sales goals spent more on cost per lead than the average ($128 vs. $112), “exceeders” in 2018 spent significantly less ($72 vs. $126).
• Cost per sale. Brands that exceeded their 2018 goals spent less than half of the average ($3,974 vs. $8,984) – and significantly less than in 2017 ($3,974 vs. $6,398).
• Applications to sales ratios. Brands that exceeded their 2018 goals also exceeded the average ratios for applications to sales (39 percent vs. 23 percent).
• Discovery day-to-sales ratios. Brands that exceeded 2018 goals had a 12% higher closing ratio than average (83 percent vs. 71 percent).

Among other things, these numbers indicate that franchisors exceeding their goals are much more efficient in their recruitment spending than the average. In short, the better performers are spending less and getting better results. This table shows the results of the top performers compared with the average for all survey participants for the past 2 years.

 Next time: Franchisors exceeding goals by segment.

 Ordering Information
 The complete 2019 AFDR, with analysis and benchmarks, is available for $350. For ordering information, go to https://afdr.franchiseupdate.com or email your questions to AFDR@franchiseupdatemedia.com.