Franchisors Understand that “It's the Economy, Stupid”

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Franchisors continue improving the quality of their franchise offering as the economy remains weak and job seekers now outnumber openings six to one according to The New York Times

Completing the third quarter of 2009 we continue to see an increased number of franchise companies using confidential franchisee surveys to improve the quality of their franchise opportunity. According to Jeff Johnson founder and CEO of the Franchise Research Institute®, more outplaced executives are choosing to become self employed to gain more control over their financial and personal future. These individuals have business backgrounds, excellent communication skills, know how to work within a team environment and don’t want to reinvent “the wheel”. These savvy business people are looking for the best franchise investments available.

Because franchisees are the consumers of the “franchise product,” and their success is crucial to a franchise company’s success, World-Class CEO’s are increasingly using confidential franchisee surveys to benchmark and improve support programs. Our research has shown that the single greatest predictor of a franchisee’s success is the degree to which a franchise company provides expert guidance and assistance not only during the crucial start-up phase, but during day-to-day operation of the business itself.

The more effective a franchise company is at sharing its expertise, the greater the chance that an individual franchisee will be successful. Well-informed prospects are looking at the quality of support programs individual companies have in place to assist them throughout the various stages of development. The FranSurvey® certification system allows companies to show prospects confidential first-hand ratings of their support programs taken directly from their existing franchisees; saving prospects the tedious and ineffective task of calling individual franchisees for validation.

Taking the phrase made famous by James Carville during Bill Clinton’s 1992 presidential campaign, “It’s the economy, stupid”, these certified World-Class Franchise® companies have simply chosen to differentiate themselves further from mediocre franchise opportunities by forging stronger alliances with their franchisee stakeholders. “Nothing attracts great franchise prospects like extremely satisfied and enthusiastic franchisees,” states Johnson, previously a 17+ year franchisee/Area Developer himself. “World-Class Franchise CEOs are concerned about the long term success of their franchisees.”

Jim Booth, President and CEO of Comfort Keepers says a key component of the decision making process for anyone seriously considering a franchise is validation of the system by current franchisees. “Comfort Keepers feels it’s critical for us to ensure, through the confidential franchisee survey program created by the Franchise Research Institute that the programs, training and support we provide is meeting or exceeding the system's expectations.” Then, not only “do we know how we as the franchisor are doing,” but the results of the survey are an “invaluable resource for the prospective franchisees” as well.

Echoing these sentiments is Spring-Green Lawn Care President James Young when referring to his FranSurvey® report as the equivalent of someone requesting a CARFAX report when purchasing a vehicle, “It has become the norm. Under the current economic conditions we’re seeing top notch candidates scrutinize our support systems as well as performing extensive due diligence on the relationship that we have with our franchisees.” Young went on to say, “we are fully aware that candidates are looking for complete transparency and a strong track record,” both of which are reflected through the survey process.

In the end, the relationship between franchisee and franchisor is one of the pivotal factors determining the success or failure of the system itself. Joseph Schumacher, COO of Goddard Systems Inc., says his company utilizes the Franchise Research Institute survey programs to “measure both how strong the relationship is and to determine how to make it even better.” According to Johnson, “I believe this trend is here to stay. Partnering with franchisees to improve the quality of their business and the move toward excellence, away from a short term focus on sales and development, is a very positive trend for franchising. The current economic climate, coupled with the difficulty new franchisees have obtaining money, are forcing weak concepts out of business and good franchises toward excellence.”

About the Franchise research Institute®
The Franchise Research Institute® is a market research and consulting firm founded on the fundamental premise that excellence in franchising is accomplished through sound business decisions based on solid business research. The Franchise Research Institute® was launched by veteran franchise business entrepreneur Jeff Johnson who purchased his first franchise in 1984. He has been involved in franchising for 25+ years as a multi-unit franchisee, Area Developer and founded the Institute in 2002 which is headquartered in Lincoln, Nebraska. For more information about the Franchise Research Institute visit http://www.FranchiseResearchInstitue.com . To review survey reports of companies using the FranSurvey certification system visit http://www.World-ClassFranchise.com.

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Jeff Johnson

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