2021 Annual Franchise Development Report - Brokers
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 the budget vs. effectiveness of a brand’s total spend.
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.
Brokers have their upsides
This is one of the new categories this year, as brands turned to brokers to help fill their pipelines.
“It’s no surprise that brokers specializing in franchising have a higher success rate than those who don’t,” said Phibbs.
Service brands reported the highest success rates with brokers: more than half (55%) of non-brick-and-mortar service brands reported closing deals through brokers; for brick-and-mortar service brands that figure was 24%.
But are they for you?
Broker success varies with how much it costs a prospect to buy into a brand. Brands with an investment of $250,000 or less found the greatest success with brokers (58%), followed by brands requiring investments of $250,000 to $500,000 (34%), and those costing upward of $500,000 (6%).
This year broker success rates also were affected by the coronavirus. Of the brands that closed deals with brokers, 55% had closed or partially closed locations during Covid (32% partially, and 23% fully closed).
Next time: Essential businesses & business challenges.
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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