2019 AFDR Highlights: Franchisors Exceeding their Goals, by Segment

By: Eddy Goldberg | 1,973 Reads | 2 Shares

This is the ninth 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.)

By segment, food brands that exceeded their goals (27 percent) dropped precipitously from previous years. Possible explanations include oversaturation of the domestic market for fast food brands, changing consumer preferences for healthier fare and/or better service, and the spate of mergers and acquisitions resulting in consolidation.

This also could explain why so many U.S. food brands are looking overseas for growth. (See our Franchise Update International Report for more.)

The segment that fared best by far was investments above $250,000, where 3 out of 4 (77 percent) brands exceeded their goals. Brick-and-mortar services exceeding their goals fell from the previous 2 years, while services based on territory/population doubled from the previous 3 years. A comparison of the "exceeders" by industry segment, reveals the following:

Segment	2018	2017	2016	2015
Food	27%	40%	44%	59%
Retail non-food	13%	5%	9%	11%
Service (brick and mortar)	20%	25%	30%	15%
Service (territory/population)	20%	10%	9%	11%
Retail food	20%	20%	9%	4%
Investment per unit > $250,000	77%	63%	57%	71%

Next time:

7 of the most important things more successful brands have done in their franchise recruitment and development efforts that helped them rise above the competition.

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 [email protected].

Published: August 5th, 2019