2021 Annual Franchise Development Report - Recruitment Budgets, 2014-2021

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 last issue with an overview of the research, analysis, and methodology used in the report. This time we dig into recruitment budgets with a look at the changes over the past 8 years.

Background

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.

Recruitment Budgets: 8-Year Trend

Median and average budget plans for 2021 are lower than in 2020, when they reached a 7-year high. In fact, said Phibbs, this is the lowest planned spend for recruitment budget in years.

In this year of tumult and change, only 30% of franchisors who responded to the survey had their 2021 budgets nailed down. “We’ve never seen so many franchise organizations without budgets in place at this time of the year,” she said.

The predominant reasons respondents cited were decreased system-wide sales; confusion, as franchise development teams don’t know what to spend and where to place the dollars; and the most obvious and perhaps largest reason: uncertainty about Covid and its long-term impact to their systems, consumers, and the U.S. economy.

Next time: 2020 Spend: Budget vs. Effectiveness

Ordering Information

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.