2021 Annual Franchise Development Report - 2020 Spend: Budgets vs. Effectiveness
With spring in the air and Covid vaccines in more bodies, it’s time to move from recovery to growth. That’s why we’ve started this series of highlights from the 2021 Annual Franchise Development Report (AFDR). We began with an overview of the research, analysis, and methodology used in the report. The previous issue covered recruitment budgets with a look into the changes over the past 8 years.
The results from the 2021 AFDR were unveiled last October at the first-ever Franchise Leadership & Growth Virtual Conference (FLGVC). New in this year’s report is survey data on the effects of the Covid-19 pandemic and new statistics on the changing role franchise brokers play in the development process. Because of Covid, the AFDR was combined with the Annual Franchise Marketing Report (AFMR) this year.
Participants in the survey consisted of franchisors that completed an in-depth 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 2021 AFDR/AFMR.
Highlights from the report were presented in a general session at the conference by Franchise Update Media’s EVP and Chief Content Officer Diane Phibbs and CEO Therese Thilgen. Ordering information is at the end of the article. Conference attendees received a complimentary copy.
2020 Spend: Budget vs. Effectiveness
When you consider that many lead generation activities were halted at the beginning of the pandemic, it makes sense that in 2020 digital, print, and PR spending declined, with trade shows taking a big hit as the country closed down. A separate survey question revealed that lead generation activities that were paused included digital (28%), trade shows (27%), and print (22%).
“When travel is canceled, transitioning budgeted dollars to other activities makes sense,” said Phibbs. “We learned that franchise brands are building budgeted line items for brokers, so we added a broker category to the survey,” she said.
The “Other” category, which shot up this year to 26% of spend, includes franchise opportunity websites at 11% of spend, said Phibbs. “So it looks to me that if it wasn’t already planned, development executives were shifting some of their resources to update and upgrade their franchise opportunity websites, which is a really smart move given that people were at home and learning from those websites.”
Referrals, as they have for years, remain the most cost-efficient lead generation method.
Next time: 2020 Digital Spend: Budget vs. Effectiveness
As an additional bonus, the AFDR was combined with the Annual Franchise Marketing Report (AFMR) this year. The price for the combined report is $350. As noted, all conference attendees received a complimentary copy. Place orders at https://afdr.afrm.franchiseupdate.com.
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