Franchise Excellence Research Report


First up, I need to congratulate Greg and his team. The Franchise Excellence Research Report is clearly the result of a mammoth research effort. In turn, the output has significant implications for profiling, targeting, selecting, supporting, managing and leading franchisees.

The research pulls together dimensions of four key concepts; namely franchisee performance, franchisee satisfaction, franchisee psycho-social factors, and franchisee bio-data (a mixture of franchisee demographics and operating facts). Bottom-line, the report seeks to better understand the drivers of franchisee satisfaction and performance.

Each concept comprises a multitude of variables. As examples:

Franchisee performance gives consideration to financial achievement, customer experience, and the extent to which the franchisee behaves constructively within the network;

Franchisee satisfaction comprises 10 different measures ranging from work satisfaction, and franchisor trustworthiness to intentions to remain;

Franchisee psycho-social attributes comprise 16 variables including, for example, brand passion, pro-activity, sale orientation and vigour; and finally

Franchisee bio-data, ranges from age, gender and education, to franchise tenure, hours of work, literacy and original franchisee motivations.

In total there are more than 45 variables, giving rise to lots of interesting correlations to consider. I also have to acknowledge the considerable work on scales underlying each variable. Not a 5-minute job by any stretch.

The dataset comprised just upward of 1,800 mostly Australian [and a few New Zealand] franchisee responses covering measures of franchisee satisfaction, psycho-social and bio-data factors. These were then matched with circa 1,600 franchisor responses categorising individual franchisee performance, behaviour, and, the likelihood they would be selected again (by the franchisor).

Overall there are over ten separate chapters exploring the impact of one category of variables on another. I have to admit, my appetite was firmly whetted by the half way mark.

With such a large array of concepts, dimensions and variables, I'd describe the report as a data mining exercise - with a focus on identifying and displaying significant relationships.

Three chapters I found particularly interesting include:

Chapter 5: The relationship between psycho-social attributes and performance. Here we find especially interesting correlations between franchisee self-reported measures of brand passion, family & social support, positive outlook, sales orientation and pro-activity on franchisee performance and/or the franchisor's decision to re-select the franchisee in hindsight.

Brand passion, in turn, was interesting because franchisees with low brand passion were, amongst other correlates, less likely to participate in franchise network activities, comply with operational systems, and, promote their businesses locally.

Chapter 9: Impact of background and demographic factors on performance and satisfaction. Here you might be interested to know that male franchisees make more money than women franchisees and are more satisfied with their financial performance.

Meanwhile, female franchisees make better franchisee citizens and are rated higher on measures of constructive participation. In another separate example, we witness the significant and important impact English as a Second Language can have on each aspect of performance.

Chapter 13: How franchisees differ by industry type. Whilst the six industry categories discussed (Retail Food, Retail Service, Retail Product, Mobile Sale, Mobile Service and Business to Business) no doubt roll up a diverse range of businesses, and the data sets were sometimes individually small, there were some very interesting insights.

Many of the insights related to demographic or bio-data like, as examples, the facts:

22% of responding Retail Food franchisees worked more than 60 hours per week, compared to the next highest, Retail Product at 15%.

Mobile Service involved the least at 5%.

Retail Food on average hired 25.2 staff, compared to 9.9 in Retail Product.

Analysis of franchisee psycho-social factors and performance by industry also yielded interesting differences. As examples, brand passion, family & social support, and intrinsic motivation were the top discriminating factors differentiating between high and low performers for retail food.

By contrast, for Mobile Sales, key differentiators were leadership potential, comfort with technology, and intrinsic motivation.

But no finding hit me between the eyes like this one: That is the finding that franchisees with postgraduate university qualifications make significantly less money than franchisees featuring a high school only education. Clearly no franchisor in their right mind would select me.

This isn't a book for the light of wallet. The price is AU$790. However, you do need to expect that given the density of information.

Those deeper thinking Franchise Geeks will get more out of the book, as it does requires some interpretation, consideration and contemplation. Some ideas may also require consultation before application.

Congratulations again to Greg and the team at FRI. With more than 70 charts (often comprising multiple variables), and considerably more analysis to boot, this is a monumental and valuable piece of work.

You can purchase the book here

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