Advisory Apr, 27 2012

Happy franchisees attract fresh referrals

Franchisees can make or break a franchise. Satisfied established franchisees may attract new franchisees while unsatisfied and unhappy franchisees may affect the reputation of the franchise. Read on to know more...

By Abha Garyali
Sub Editor
Happy franchisees attract fresh referrals

A business is considered to be successful if it is well known and recognised by the business fraternity and makes regular and high profits in its dealings. Similarly, a franchise brand may become successful if it makes profits as well as shares a good reputation among other brands. Making or spoiling the reputation of a brand, to an extent lies in the hands of franchise partners. Franchisee satisfaction is thus an essential pillar of franchise success. It is imperative to keep franchisees satisfied so that they create good references for the franchisor and his company in the outside world. Learn more about the importance of franchisees satisfaction for the success of a franchise brand.

Fundamentals of franchisee satisfaction

Franchisors generally commit some fundamentals to the aspiring franchisees to attract them to become their partners. Some these fundamentals are:

  • Initial training and support, the cost of which is included in the franchisee fees
  • Two-way communication between franchisor and franchisees
  • Effective business consulting during the franchise tenure

The above stated rudiments form the basis of franchisee satisfaction. If all franchisors follow these fundamentals, franchisees will never get a single chance to complaint. Therefore, it can be said that franchisee satisfaction is in the hand of franchisors but franchisees also have to put in their best efforts for franchise success.

Importance of franchise referrals

Word of mouth is the most traditional and effective means of promotion. Products and services can take any business to newer heights but only when they are utilised. To convince people to use a particular product or service can effectively be done with the word of mouth that can make a franchise popular. More and more aspirants get impressed if franchisees speak well about the franchisor and his way of dealing with franchise hurdles. Moreover what franchisees think about the franchisor cannot be influenced by monetary incentives and other benefits promised by the franchisor. Sharing the brand name with the franchisor, it is franchisee’s business also. Therefore the basis for most referrals is the franchisee's pride in his brand and joy in sharing his success story with others. If present franchisees are satisfied and consider that the franchisor has been fulfilling all promises made by him, he would give good referrals about the brand owner and attract more aspiring entrepreneurs into the network.

Satisfied franchisees for franchise success

Franchisee satisfaction is critical to the franchise development process because it is directly related to new franchisee validation and the ability for the brand to continue to develop new stores. One great new store opening will lead to more new store openings. In certain cases it is seen that few franchisors make a blunder by not paying too much attention on their franchisees once their brand becomes successful and established. However, franchisors should keep in mind that franchisees are the foremost source of getting new franchisees in their network. Satisfied franchisees share their success and experiences with family, friends, colleagues, and many others. This praise may boost some or many of such referral to become franchisees. On the other hand franchisees, if unhappy with the franchisor can share the negative points of the brand which can surely hamper the growth of the business.

To conclude it can be said that for a successful franchise network it is essential to develop good referrals from franchisee. Considering the past success of the brand does not necessarily guarantee future accomplishments without support from franchisees.

Related: Challenges faced in educational franchising

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