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What Do Franchisees Want?

Survey attempts to answer age-old question in food business


Ask any restaurant franchisor who they’re looking for as a prospective franchisee and you’ll discover how small the world really is: They’re all looking for the same multi-unit franchisee. They want someone who already has the infrastructure and team in place, who has access to financing and is an exceptional operator.

That may be what franchisors want, but what do those in-demand franchisees need in order to decide on a second or third concept? We didn’t know for sure, which is why Franchise Times teamed up with Campbell Communications, a research company that has conducted similar studies for the insurance and real estate fields.

The study is at the halfway point—Campbell wants additional input from franchisees before issuing its final report—but already, the findings are thought-provoking. As the team at Campbell Communications was crafting the survey, they spoke with numerous franchise sales executives to ask what they needed to know in order to attract—and retain—the caliber of candidates they want to draw to their systems.

The majority of respondents were from the quick-service industry; however, some casual-dining chain franchisees weighed in also.

Here are a few of the findings so far. But keep in mind, it’s not too late for multi-unit franchisees to weigh in on the findings—participants in the short survey will receive a free copy of the survey results to see how they stack up against their peers.


What franchisees really want

  • Multi-unit franchisees aren’t willing to sit out the present recession. About one-third of the respondents are interested in pursing additional opportunities.
  • A commonly held belief in franchising is that the cash requirement is the most important factor a franchisee considers in the inquiry phase. But according to this research, the cash requirement is No. 9, although, yes, the initial investment is No. 1. Factors considered more important include visibility of the brand and the sales of stores in the area, which were No. 2 and No. 3 respectively. (See chart above)
  • These franchisees found that the best sources of information on franchise opportunities included friends in the industry, business and trade publications and Web sites. But not just any Web sites. About 74 percent went directly to the franchisor’s Web site to research the brand, far more than went to community sites. This means that not only is branding exceedingly important if you want prospective franchisees to know about your company and what you do, but your Web site needs to be easy to navigate and informative on both the franchise and the customer level.
  • When it comes to closing the deal, the most important factor was being able to contact existing franchisees, according to 54 percent of respondents. So knowing what your franchisees are saying about you, and ensuring they’re willing to talk to your prospective franchisee pool is critical. As one franchisee said: “They’ve become very greedy and provide little or no support. They will sell a franchise to anyone with money, and many non-experienced restaurant people have come and gone in a short time.” Surprisingly, respondents considered Discovery Days or the time it took from signing to the store opening its doors as much less important than other factors.
  • Almost half of the respondents said their franchisors didn’t offer either financing or help arranging financing, but they wished the franchisor would step up and help. For franchisors who have the ability, expert guidance in arranging financing may be one way to differentiate yourself. Franchisees aren’t expecting financing; one in particular wished for “best practices on how to obtain lending to grow my business.”

The full results of the survey will be available in May. Anyone interested in finding out more about purchasing a copy or participating in the final phase, contact John Campbell at john@campbellsurveys.com. Franchise Times will run a second, more detailed article on the findings later this year.




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