2022 Annual Franchise Development Report (AFDR), Part 1: Recruitment Budgets
Highlights from the 2022 Annual Franchise Development Report (AFDR) were unveiled at the Franchise Leadership & Development Conference (FLDC) in October.
Participants 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, spending allocations, and strategies of a wide cross-section of franchisors. The data and accompanying commentary and analysis provided the basis of the 2022 AFDR.
Highlights from the report were presented in a general session by Franchise Update Media EVP and Chief Content Officer Diane Phibbs and Wild Birds Unlimited CDO Paul Pickett. Below are selected highlights. All conference attendees received a complimentary copy.
Overall, 2022 planned recruitment budgets came in at the highest level ever in the report’s history, averaging $261,543 with a median of $200,000. That far outstrips last year’s Covid-depressed average of $174,770 and median of $120,000. It also tops 2020’s recruitment budgets of $215,173 average and median of $150,000 – pre-Covid planning numbers that represented a 7-year high at the time. For further comparison, those figures in 2019 were $186,818 (average) and $127,000 (median).
It doesn’t take a PhD in statistics to see that 2021’s recruitment budgets, planned in 2020, were significantly reduced by the uncertainty of the pandemic. As we noted in last year’s survey, only 30% of franchisors who responded had their 2021 budgets nailed down. “We’ve never seen so many franchise organizations without budgets in place at this time of the year,” Phibbs said at the time.
Nor does it take a marketing genius to attribute the record spending plans for next year to pent-up demand, revamped recruitment programs tailored to the changing needs and wants of prospects, and a growing sense of optimism by franchise development teams.
One year ago, the predominant reasons respondents cited for reduced recruitment spending were lower system-wide sales; confusion, as franchise development teams not only didn’t know how much to spend, but where to spend it; with perhaps the most obvious and largest reason being uncertainty about Covid and its long-term effects on their systems, consumers, and the U.S. economy.
And while things settled down somewhat as 2021 drew to a close (until Omicron showed up, anyway), the road ahead remains much less certain than in previous years, perhaps even more so than after the Great Recession.
Next time: 2021 Spend: Budget vs. Effectiveness
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