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Jun, 10 2011

Measure of happiness & your Franchise Relation

The study of Franchisee Satisfaction Index (FSI) aims to facilitate the franchisor to realise the need gap in their franchise systems so as to align resource towards a better future for the business.

The study of Franchisee Satisfaction Index (FSI) aims to facilitate the franchisor to realise the need gap in their franchise systems so as to align resource towards a better future for the business.

FRANCHISEE Satisfaction Index (FSI) independently and impartially calibrates the satisfaction levels of franchisees of national and international brands, which enables both the franchisee and the franchisor to sustain profitable relationships. We conduct this study every year to gauge the level of satisfaction of franchisees from the services provided by the franchisors.

Franchisee Satisfaction Index (FSI)

Franchisee Satisfaction Index is a measure of franchisees' satisfaction from the present franchise systems as well as an indicator for the level of optimism for future prospects. The index brings out franchisee satisfaction on the following parameters: franchise system indicator, training support indicator and the franchisee experience. It is a comprehensive rating scale through which franchisees rate their franchisor. It captures the experience of being associated with a national / international brand.

Franchise System Indicator: This includes indicatives of satisfaction for operational aspects of the franchise system, including pre-opening support, operational support, technical support and new product development.

Training Support Indicator: This is an indicator of the training resources invested by the franchisor. It indicates the extent of content of franchisee from the initial as well as ongoing training given to his staff by the franchisor.

Franchisee experience: It points towards the experience of the franchisee in being associating with the brand in terms of how well has the brand been received and what difficulties it faced.

Results

The survey encompassed 1,000 franchisees of various brands and industries. Around 12.5 per cent of the franchisees were less than one-year-old whereas 31.3 per cent of the franchisees were one to two-year-old. Maximum franchisees (34.4% ) in sample were more than five-year-old. Most of the franchisees surveyed (56.3%) had no industry-related experience but still took up the franchise. They experience no direct connection between performance of the unit to previous experience.

Performance card- Services provided by the franchisor

1. Quality of initial training

Majority of the respondents (43.8%) were of the opinion that the quality of initial training provided by their franchisor is very good while 31.3% of the respondents were highly satisfied by the quality of initial training provided by their franchisor. Only a few respondents (3.1%) were not satisfied with the quality of initial training.

2. Pre-opening support

Franchisees rated the pre-opening support provided by their franchisor on a scale of 1 to 5. Majority of the respondents rated the pre-opening support as excellent (43.8%) and very good (34.4%), implying high rate of satisfaction. A few respondents rated average (12.5%), below average (3.1%) and poor (3.1%), implying lower rate of satisfaction.

3. Ongoing training

On a scale of 5, when asked to rate the ongoing training provided by their franchisor, majority of the respondents rated it as excellent and very good (31.3%). At the same time, some franchisees were indifferent and dissatisfied by the level of ongoing training (25%).

4. Communication between franchisees

Communication is vital for overall level of satisfaction amongst franchisees. When franchisees communicate with one other, they are in a better position to learn from varied experience. It also allows them to feel less insecure about the uncertainties of the business and every franchisor must facilitate the same. A majority rated their communication between the franchisees as excellent (34.4%) and very good (31.3%), expressing satisfaction. On the other hand, 12.5% rated it as average, below average (9.4%) and poor (9.4%).

5. Technical support

Franchisees opted for a very good rating (40.6%) and excellent rating (25%), demonstrating high degree of satisfaction. There were few franchisees who were of the opinion that there is not enough technical support and it could have been better (15.6%).

6. New product/service introduced by the franchisor

When asked to rate on a scale of 5 a new product or service introduced by the franchisor, majority of the respondents opted for an average rating (31.3%) while (28.1 %) rated it as very good and another (21.9%) rated it excellent. This is an indicator that franchisors have not been innovative or aggressive in product introduction. This is critical for franchisee satisfaction, as it helps in developing trust amongst the franchisee that the brand is growing and developing a profitable portfolio further.

7. Advertising, marketing and/or promotional material

Franchisees were moderately satisfied by the quality of advertising, marketing or promotional material provided by their franchisor, as majority of the respondents rated it as very good (40.6%). There were respondents who rated the same as average (15.6%). This is one of the most critical inputs from franchisor and is important for the performance of a franchise unit. Apparently, franchisees see some scope of improvement in this area.

Conclusion

Overall, franchisees were moderately satisfied by the services provided by franchisor. However, long-term sustainability of franchisor- franchisee relationship needs constant effort towards a mutually benefiting association.

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