Franchise Business Review Survey: Franchisees More Satisfied, Profitable Than a Year Ago

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75% of Respondents Rate Financial Performance Moderate to Very Strong

General franchisee satisfaction was up 9 percent to 83 percent—a significant year-over-year jump compared with previous years.

Franchise operators are feeling the positive effects of the improved economy, suggests a recent franchisee satisfaction survey conducted by Franchise Business Review.

Survey respondents said they were significantly more satisfied with their business performance and operations than a year ago. General franchisee satisfaction was up 9 percent to 83 percent—a significant year-over-year jump compared with previous years. Satisfaction with current financial picture was up 7 percent to 75 percent.

“We’re seeing strong improvement across the board in franchisee satisfaction from a year ago. Small businesses are leading the economic recovery, and franchisees are obviously feeling a positive impact,” said Franchise Business Review president and CEO Eric Stites.

The Franchise Business Review findings are based on a late 2010 survey of more than 10,000 franchisees from more than 200 franchise brands. The survey includes 33 benchmark questions, relating to the franchisee’s experience and satisfaction as well as market area, business lifestyle, and other demographic characteristics. The survey is used to compile Franchise Business Review’s Guide to Today’s Top Franchises, an annual listing of the franchise companies with the highest franchisee satisfaction scores.

The companies with the most satisfied franchisees (the top 30 companies on Franchise Business Review’s list) also had the most profitable franchisees. Respondents from these companies had profitability 16 percent higher than Franchise Business Review’s benchmark data.

Overall, 83 percent of franchisees have a positive attitude about their affiliation with their franchise company. Twenty-four percent of those surveyed are feeling more positive than a year ago, compared to just 12 percent that are feeling less positive.

Ratings in the area of training and support services provided by franchisors showed the greatest improvements—increasing by 14% year-over-year to 83 percent. Satisfaction with marketing and promotional programs jumped from 61 percent to 74 percent.

“Many franchisors stepped up the support of their franchisees during the challenging economic times, and this has clearly made a huge difference,” Stites said.

Franchisors still need to improve on franchisee involvement, according to the survey. On the question, “Senior Management Involves Franchisees in important company decisions,” overall ratings were just 60%, a low rating compared to other survey categories.

Franchise Business Review’s list of franchises with the highest franchisee satisfaction grew by 20 companies this year to a total of 153, reflecting a significant increase in the baseline franchisee satisfaction score from previous years. Many companies that appear on the annual list year after year managed to raise their satisfaction scores even higher this past year.

“While credit markets remain tight, I anticipate that many franchise systems will see improved growth in 2011 as a direct result of higher franchisee satisfaction levels and more positive attitudes in general,” Stites said. “Significantly more franchisee candidates will make the decision to invest in franchise opportunity this year—especially with franchise systems that require lower initial startup costs.”

The Top Franchises represent a variety of franchise concepts, including a junior golf program, a mosquito elimination company, and a pool player association.

In addition to the Guide to Today’s Top Franchises, Franchise Business Review publishes reports throughout the year on the top-rated companies and industry segments within the franchise marketplace. Many of the franchise companies that are researched use Franchise Business Review’s Franchisee Satisfaction Index (FSI)™ to benchmark their annual performance. Franchise Business Review consults with these franchise systems to assist them with improving their operational and franchisee performance by sharing industry best practices.

About Franchise Business Review

Franchise Business Review is a national franchise market research firm that performs independent surveys of franchisee satisfaction and franchise buyer experiences. The firm’s services include commissioned franchise research projects, as well as industry-wide studies of franchisee satisfaction. Franchise Business Review is headquartered in Portsmouth, NH, and can be reached at (603) 433-2270.

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Molly Rowe
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