Research Apr, 08 2010

Education franchisee satisfaction index

If you cannot measure it, you cannot manage it, with this view in mind, The Franchising World carried out a survey over Franchise Satisfaction Index to measure how education franchisee rate their franchisors in terms of training, marketing, and operationa

By Shimona Talwar
Research Analyst
Education franchisee satisfaction index

Education remains the business of the nobles and an investment by the wise. Education concepts have a mass appeal and diverse acceptability which also enables easy replication. Hence, no surprises that education and training franchising constitutes 32 per cent of the total franchising activity in India. Of the total 1200 franchisors, over 390 are education franchisors. It is thus, essential to facilitate the franchisor to realise the gap in their franchise systems and align resource towards better business prospects.

The Franchising World magazine, a premier publication by Franchising India Holding Ltd conducted a franchisee survey to calibrate the satisfaction levels of education franchisees which will enable both the franchisee and the franchisor sustain future profitable relationships.

Franchisee satisfaction Index (FSI)

Franchisee satisfaction Index is the measure of franchisees satisfaction from the present franchise systems as well as an indicator for the level of optimism for future benefits.. The index constitutes four indicators; Franchise System Indicator, Marketing Support Indicator, Training Support Indicator, and Franchise Confidence Indicator. It is a comprehensive rating scale which franchisees rate their franchisor as well as his franchise infrastructure on a five-point scale over 30 different parameters.

The survey

The sample for the study consisted of 75 education franchisees across nation’s diverse geographies from mainly three categories i.e., basic education, skill training, and coaching classes and tutorial. The profile of education franchisees has been a mixed one with people both with (54 per cent) or without (46 per cent) education backgrounds venturing into education entrepreneurship. It was also observed that on an average, an education franchise took one to three years to become profitable.

Education franchisee satisfaction index performance

The survey concluded that the education franchisees are fairly contented with their franchise infrastructure. Over all, franchisees rated their franchisors 3.7 on a scale of 1-5 (1-poor and 5-excellent).

The individual indicator performance is as follows:

  • Franchise system indicator includes indicatives of satisfaction for operational aspects. Like pre opening support, operational support, technical support, new product development. Franchisees rated very positive (ie.,3.7) for educational franchise systems indicating that the sector is living up to its reputation of being one of the most mature franchise systems. Operational efficiencies are very crucial for healthy franchising. Education franchisees seem to be very happy with the support they receive from their franchisor.
  • Marketing support indicator involves marketing and promotional support received by the franchisee from the franchisor which included national as well as regional marketing. It also calibrates the satisfaction levels of local marketing activities and in store marketing as well. The franchisees were dissatisfied up to a large extent from the marketing support that they received from the brand owners. Education concepts largely seek a typical marketing plan, though franchisees were mostly satisfied with the national promotional resources (3.5 on a scale of five). However, most of the franchisees seek regional level marketing activities. Education franchisees surveyed recommended a region specific marketing plan to ensure adequate visibility of the concept as well as the brand.
  • Training support indicator is an indicator of the training resources invested in the franchise system by the franchisor. It indicates the level of satisfaction the franchisee has from the initial as well ongoing training employed by the franchisor. Most of the education systems in India work on hub and spoke model of training, which means franchisors centrally ensure quality services to the end consumer. Franchisees were largely happy with the training resources provided by education franchisors. A very good rating (4.2) is an indicator that the ongoing training is guaranteed by the parent brand owner.
  • Franchisee confidence indicator gives an indicative idea of how satisfied the franchisees were from previous profits and how optimistic they are about future profit expectations. The survey found that it takes about three to five years for basic education franchise system to turn profitable where as skill training and a coaching franchise system turns profitable in an average one to three years.

Scope for improvement

A keen observation is that most of the franchisees who participated in the survey had huge respect for education as a business venture.

The survey tried to explore the gap between the franchisee-franchisor to identify the crucial areas that could be worked upon to facilitate the evolution of healthy franchise. Of the most education franchisees surveyed, 48 per cent believed local as well as regional marketing is one area which has the most scope of improvement (SFI). Another 24 per cent of the sample believed that hiring as well as training is another area which has a significant SFI. It was also observed that franchisor can improve its systems in the area of finance and accounting five per cent, eight per cent operations, five per cent sales, and customer service nine per cent. Thus, survey strongly recommends education franchisors to work on their marketing and local promotions in order to bring out profitable synergies.

Related: F&B brands climb floors for sustainability

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