From A to Franchisee: The Podcast for Smarter Franchise Buying

The Importance of Franchisee Satisfaction

• Franchise Business Review • Season 1 • Episode 7

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In this episode, Michelle Rowan and Anneliese Brosch delve into the critical role of franchisee satisfaction in maintaining brand health. They explore how a strong franchisor-franchisee relationship can drive success, emphasizing the importance of trust and open communication. Discover the metrics and insights that help franchise brands thrive, and learn why understanding franchisee satisfaction is key to sustainable growth. Tune in for expert advice and real-world examples that highlight the power of satisfied franchisees in building a resilient brand.

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Michelle Rowan (00:01.232)
Welcome to today's podcast where we're going to talk about the importance of franchisee satisfaction. And today my guest is Anneliese Broche. She spearheads our customer success team here at Franchise Business Review. So she really helps us just deliver the most excellent customer support we can to our clients and has jumped right in. She's not even been with us very long, but she has become such an asset to our clients and to our team.

She brings over a decade of experience in marketing and account management roles. And outside of work, Annalise is a mom, a surfer, and a nature lover. She's actually the first one to wish us all a happy summer solstice, which we appreciate about her. Thanks for joining us today, Annalise.

Anneliese Brosch (00:42.414)
Thank you, Michelle. I'm very, very happy to be here.

Michelle Rowan (00:50.416)
I am happy to have you here. So I'm gonna just start with what do you think franchisee satisfaction is? How would you define it?

Anneliese Brosch (00:58.818)
That's a great way to start. I, as you mentioned, I come from the marketing side of things. So I always have a little bit of that lens. And in my opinion, franchisee satisfaction is almost like a brand health metric because the franchise or in the franchisee relies so much on each other that if the franchisees are unsatisfied and not happy, the brand itself suffers. So

I think it's that important of a metric. I think it's really a brand health metric.

Michelle Rowan (01:35.112)
I totally agree. Yeah, I mean, I'll tell people all the time when I talk with them that franchisee satisfaction and unit level economics are really the just best indicators at what kind of brand you're looking at. So I think something that's also fun to talk about is what franchisee satisfaction isn't. And I can just kind of go back to those first conversations, you know, we started 20 years ago and I think the whole world was different then and that

Franchiseurs weren't really interested in getting feedback from their franchisees in a lot of cases. And one thing that I would hear is my franchisees are happy they're making money. And so I think that it's important to know that your relationship between the franchisor and franchisee will ebb and flow. And that's OK. But even when you're unhappy with changes or things that are happening in the moment, it's really about thinking about the overall relationship with that brand and

really, would you recommend the franchise to others? That's what I think most people want to know is even through the ups and downs, would you still invest in this? So I think it's important for people to segment out. Making money, I think, helps things be better, but it is not the most important thing that leads to franchisee satisfaction.

Anneliese Brosch (02:50.77)
I agree with you. And one of the things I always think about is, yes, some of these brands are larger and folks are now in these leadership positions that didn't necessarily found the brand. But if you think about the whole model, which was founded by someone, right? And they had this business that they wanted other people to be able to partake in the consistency that needs to happen from the franchisor level down to each and every franchisee to make that all work.

Michelle Rowan (03:02.451)
Yes.

Anneliese Brosch (03:20.662)
and feel like a cohesive brand, I think all of that feeds into how satisfied they are, how much pride they have in the business and the brand and running it. So I totally agree with you.

Michelle Rowan (03:32.349)
Yeah, that's good. So, Annalise, let's talk to our audience. So hopefully we're hearing or we're speaking to a lot of people that are considering buying a franchise. Can you tell everybody about how we determine what a brand's franchisee satisfaction score is?

Anneliese Brosch (03:50.03)
So the way that we determine that is we survey different brands. They come to us at different levels, but everybody gets 33 benchmark questions across a number of different categories. Then all those go out to the franchisees. It is anonymous by default. So if they have negative feedback and they are nervous about backlash, it is anonymous by default.

The idea is that we're getting the most unfiltered feedback possible. So we take all of the answers from those and we weight them based on system size, based on their participation rate, and then they get what is called an FSI score. And that is a weighted average of all of those. And from there, then we can pull lists and determine whether somebody ends up on an awards list or not. So that is the basic framework for how we do that.

Michelle Rowan (04:45.755)
Excellent. Okay, so let's talk about that FSI score. It stands for franchisee satisfaction index score. And it's a metric that we have created. It's, it's proprietary to us. And the idea is that we're asking all the same questions of these brands. So we have a way to compare them. I'm going to ask you to talk a little bit about the types of questions or areas that we talk about on the survey. But the idea you talked about the waiting is, if you are in a system that has 10 franchisees,

it is much easier for that corporate team to support and knock the socks off of 10 franchisees versus when you're a brand that has 200 franchisees, that becomes harder. So we recognize the fact that smaller brands should have stronger franchisee satisfaction scores. And then the other piece that you talked about was, I think just...

trying to get that holistic view of these brands. So let's talk about the sections of our survey or the types of things that we're asking franchisees to give us feedback on.

Anneliese Brosch (05:50.222)
So there are a number of categories that I mentioned, but like one of them, for example, is training and support. We ask some questions around training and support on, sorry, we're to have to that part out. Okay, so back to it. The categories that we ask are, where am I going with this, Michelle? Sorry, Allison.

Michelle Rowan (06:16.829)
You don't have to be specific on the category, so you could just say some of the topics we ask them about are.

Anneliese Brosch (06:22.67)
All right, some of the topics that we ask our franchisees about are training and support, marketing, leadership. There is an area for open text responses, so where they can actually, instead of just rating on a scale, they can put in actual feedback in the different categories there as well.

Michelle Rowan (06:44.509)
Yes, awesome. And financial opportunity. That's a big one that you didn't mention, but yes, we do ask them about that.

Anneliese Brosch (06:47.757)
Yes.

And also supporting the brand and some of the more like intangible pieces on how loyal they feel to the brand, how they feel the culture is in general, are other franchisees supporting each other, all of that stuff.

Michelle Rowan (07:04.733)
Yeah, yeah, good insights into just kind of how the franchisees perception of the culture is not what the corporate team is telling a potential buyer of their brand, which is great. So let's talk about what you I, I'm going to just kind of mix this up a little bit, but you've now had the chance to go through the results with several brands. You've been with us about nine months now, I believe. What is it like when you walk a corporate team?

through the data that they get from the franchisees that they're supporting every day.

Anneliese Brosch (07:38.328)
So the first thing we do is we always pull up the dashboard. So for those of you who don't know, clients of FBR, they engage with us. They end up getting access to what we call FBR analytics. So that is where all of their data is stored. They can slice and dice their data in different ways. And typically, the way I start a results call is I'll pull up the dashboard. And that gives them their highest rated areas. It gives them their lowest rated areas. And it gives them an idea of

if they had surveyed with us before, where they fall compared to the year before and or compared to the benchmark. So we have a lot of benchmarking in FBR Analytics, benchmarking to franchising as a whole. So that is like the the hundred and sixty plus brands that we work with. And then also benchmarking to specific. What would what would we call them? Specific segments. Yeah.

Michelle Rowan (08:34.289)
segments, sectors, types, yeah, types, so like, yeah.

Anneliese Brosch (08:37.014)
Yeah, so like food and beverage, home care, different things like that. So, I typically start there. We go through our highest rated areas and the lowest rated areas. And then we look at what, which categories had the largest swing. And what I mean by that is we typically say that if a score and a specific category is somewhere

between one and three, that's about staying level. But if it is a five point swing or more in one direction or the other, it's worth seriously digging into and seeing what has changed in the system there. So that's kind of where we go from there is we dig into each of the categories. So say it's leadership, for example. OK, I've got a good story here. I actually just got off of a call with a client yesterday and their leadership team started

just basically the entire leadership team started just after their last survey. So say their last survey was at the end of 2023. The entire leadership team basically started like December of 2023. So right after that. So they have a benchmark of what it was like pre leadership team. Then we got together and we talked about the results. So this was the newest results call that we had done with all of these leadership changes. And the jump in satisfaction with leadership alone and their field support teams was so enormous that, it was awesome to have that call with them because I could, you know, there's a lot of kudos that can go around there. But now they also have a benchmark for moving forward.

They know now that this is the work that their team can do and they can improve from there, but they know that that is now their benchmark as a team. So that was really, really helpful, I think, for them.

Michelle Rowan (10:39.419)
Yeah, yeah. So, so we try and get the entire team tuned into this data and we take them through it so they can understand how do your franchisees or where in your support do franchisees feel like you're doing well and where is there opportunity to be better franchisors or to realign the expectations of your franchise community with the, the actual support that the team offers. So

First and foremost, our survey is done confidentially as an operations tool for their teams. We're trying to help get everybody tuned into this data, even make it one of the important ways that they measure the success of their team because it's so important. So I think that that kind of speaks to what we're trying to get them to do with the data. And I think when teams show up with representation from all the types of teams that touch the franchisee, we get to celebrate and the work that we see the high scores. How about Annalise, when the scores are bad and even, I'm sorry, when the scores are low, I'll say it that way.

Anneliese Brosch (11:46.158)
Opportunity,

Michelle Rowan (11:48.121)
There's opportunity. Yeah. So talk about a call where the scores are low and not only when they're low, but when the team is surprised by the low scores.

Anneliese Brosch (11:59.446)
Well, those calls are not always the most fun to have, but they're they're really tough, especially when they're surprised. I would say the vast majority of not so great calls. They're not super surprised. There maybe was a huge change that was done. Maybe they were bought out and some things fell through the cracks. I mean, there's a lot that can happen that.

Michelle Rowan (12:04.009)
They're tough, they're tough.

Anneliese Brosch (12:26.87)
You know, we've got some clients who will know ahead of time. They're like, we know that the scores aren't going to be great this year, but we're going to do it anyway. And I think that is the most important thing is that they don't just turn a blind eye, even if they do know they're looking for areas for opportunity. And if you don't have a benchmark, similar to what I talked about before, you don't know if you've improved year over year.

Michelle Rowan (12:34.537)
That's right.

Anneliese Brosch (12:55.446)
Maybe there is a dip because of some crazy change that has happened. Sometimes that happens with tech rollouts. Those rarely go completely smoothly the way that people intended. And that just is the nature of a tech rollout. If you're at any company, you'll know that that's a really tough change. But that doesn't mean that you don't look at the data because then you can say,

This data was not super great, but we know that this year was the tech rollout. So in a year from now, we expect that this will jump back up. And if we don't, then we need to go back and reevaluate, is this big change that happened, is this worth it, or are there any changes we have to make there?

Michelle Rowan (13:40.698)
Yeah. And I think just in general, change is really, really hard for any person. Humans just are not made to just be super laid back and easy with big changes. So it is natural that that score is going to ebb and flow. The idea is how better communication can help those things or just being transparent with, this is taking us longer than we thought, or we've had some more hiccups. But they're engaging the franchisee community in that experience. I think it's

really common for franchisees to think, hey, our corporate team sits in their ivory tower. They are so out of touch with our market. They don't know what it's like to run this business. And so even when they expect to take the hits, getting the perspective of the franchisee is so important for them to understand, hey, we're all rowing in the same direction and trying to build this together. It's not us versus them, which is really, really a common. that franchisees will say or franchise corporate teams will do this, they say there is no they in franchise systems. It is a we. And so if there's a disconnect between how you guys are going to get somewhere or where you're headed, it's just disastrous. So it is hard. I, know, I will also give advice to people that jump on calls. You might want to have a glass of wine when you read through the comments. But again, this feedback is a gift because you can't respond to it if you don't know it.

And it's also to just a really great relationship builder to get up in front of a community and say, we hear you, we hear what you're saying your experiences. And we also, if they've messed up to own your mess up, people respect that. And I think it's better than being like, nope, we didn't get that wrong. We're just going to keep moving forward. Just people, people will catch on to that kind of head in the sand type of behavior from leadership.

Anneliese Brosch (15:30.51)
Totally. And I think sometimes when you actually look at the data that's coming back and the feedback that's coming back, for example, in the open text responses, sometimes that fix is pretty easy. It's just nobody upleveled it to you ever. So a really good example is I worked with, I did a results call with a brand and marketing came back as an area for opportunity. And the client was really frustrated because

Michelle Rowan (15:45.821)
Yes.

Anneliese Brosch (15:59.81)
He said, well, I've tried this, that, and the other way to drum up leads for these franchisees, but some of it is on them to do that. And he mentioned that actually they've never collected any fees for marketing and their FDD actually, because it says in their FDD that they do, but they've never actually collected fees for marketing. And I said, what if

Michelle Rowan (16:10.03)
Absolutely.

Anneliese Brosch (16:27.79)
That is just an alignment issue. You're doing this work and not actually collecting for it. I bet part of that is just a communication barrier and just saying, we're doing this and oh, by the way, we're not charging you for it because some of this is also on you.

Michelle Rowan (16:46.109)
Yeah. Well, I think that what you outlined there is really expectation. So when I go through data with people and sometimes if it's, there's a lot of stuff that they could focus on, I also will say you need to focus on the most important or what you can get done in a year. Cause if you try and tackle it all, it's not going to happen. But I think I'll say a lot of this is expectation and alignment versus actual changes that costs money and time that you need to implement. So that's a great example. Yeah.

Anneliese Brosch (16:51.063)
Yeah.

Anneliese Brosch (16:59.928)
Yeah.

Anneliese Brosch (17:11.926)
Yeah, exactly. Yep.

Michelle Rowan (17:14.823)
Let's talk about what are some of the awards that we give out, some of the lists that we use to try and help franchise buyers narrow their focus. What are some of the things that we look at and we share with our audience that comes to our site?

Anneliese Brosch (17:30.252)
So on our site, we break down the different categories in many different ways. But as far as awards lists are concerned, we've got the top 200 list usually comes out at the beginning of the year. We've got low cost top franchises for women. So we do collect demographic information and we do use that for that list. Recession resistant. So these are businesses that are more likely to have an easier time during times of recession.

Top franchises for veterans, most profitable. Culture is, I think, a great one because a lot of what we've talked about here is the culture of the brand. So I think that being on that list is, it says a lot about those companies. Most innovative and then top food. mean, food and beverage is a big category. So folks who are interested in food and beverage, I would definitely look there.

Michelle Rowan (18:22.707)
Yeah.

Michelle Rowan (18:27.677)
Yeah, and the idea is if you don't know where to start or what you might be interested in, that top 200 has got everyone that has participated in our research in the last year. But if you have narrowed your focus or you are a veteran, if you are a woman, we're trying to just help you get data that's more relevant to you. Okay, so we talked about how teams are using the data internally, and I wanted to talk a little bit about how candidates can use this data so they can engage with the brands on our site and the data that we're sharing with the client.

they can actually choose to share it with the candidate. So I wanna talk a little bit about that, and I didn't prep you for that, so I will talk about it and you can weigh in on it too. But the idea is that franchise buyers, potential buyers, at some point will connect with the franchisees of the system to talk with them directly about their experience. But that happens usually later in the process. You're gonna work directly with the franchise brand, the corporate team, they're gonna tell you all the reasons you should buy and...

Anneliese Brosch (19:06.542)
sure.

Michelle Rowan (19:26.311)
tell you about their culture and their leadership team. And what we tried to do was ask the questions on our survey that every potential buyer might want to know before they purchase. So we're kind of getting high level because we're asking the same questions, whether you're in food or you're service based brand that has a van. So we're trying to get the bulk of those initial questions asked so the franchisor can actually share that data with their candidates to say, here's some information from a third party versus us telling you how awesome we are.

So that's kind of the top level of how you can use that information. But when you go to make phone calls directly to franchise owners, some of our clients will actually let you see the individual surveys that we share, is, or that we collect, which I think is so valuable to a potential franchise owner to look at, where you see every single multiple choice answer that was answered by a franchisee. You see all those written text comments that you talked about.

super powerful as far as being transparent. And if the franchisee shared their name, you could actually connect with them directly and talk more about the stuff we're not asking. And I do believe we have a resource of questions that people should ask franchisees when you get them on the phone. And it would just be really focused on the kind of the in-depth stuff that we're not getting here. So I don't know if you want to add anything to just like how a person looking to buy a franchise brand could use our data that is given to them by their

the company they're talking with.

Anneliese Brosch (20:55.862)
Yeah, I mean, I think it's also worth noting that if they are on a one of the awards lists and a company does choose to share their data publicly, it would also some of that data would also show on our website. So that's that's worth seeing there. So you can kind of see how you kind of test the waters on how open they are to sharing their data. But I do think that. It's it's a wonderful tool because.

Michelle Rowan (21:09.385)
That's right.

Anneliese Brosch (21:24.65)
Opening any business is a serious commitment. It's a lot of work. Whether you open it yourself or you go with a franchise, there are going to be hiccups somewhere. It's not all rainbows and butterflies. It's awesome and there can be a lot of upside. However, it's about knowing where the pitfalls are and the downsides. That will help smooth out your journey rather than going in with, you know, rose colored glasses.

thinking everything's fine and within a month you're going to be clearing a million dollars in revenue. Making sure that you are very clear on the work that needs to be done here and what you are getting and what you aren't getting and what they're working on. There is a lot there, especially when you're buying into a brand, I think.

Michelle Rowan (22:14.663)
Yeah, that's a good point. And you and I are both parts of independent businesses. Your husband is doing the day to day is your own business and my husband as well. And I wonder if we had access to all of the owners out there that ran similar types of businesses, if we would understand the amount of work that goes into running these day to day. So it is it's kind of like a cheat code in franchising to see this information.

Anneliese Brosch (22:38.254)
It is. Well, it allows you to make an informed decision. And I think that's what all of this is about. Whether you're on the franchisor side or the franchisee side or you're considering it, it's about making an informed decision. So that's what I love about our data.

Michelle Rowan (22:54.429)
Yeah. Yeah. And we talked about it in the first episode with Eric Stites, our founder, on why he started Franchise Business Review. And it was to answer these questions that he wasn't able to tell a candidate what is the best franchise brand out there. So that is kind of our ultimate mission is to help franchise brands that want to bring in the right type of owner for their business to really use this information.

to make sure they know what it's gonna take to be successful in the brand. So I love that.

Anneliese Brosch (23:26.83)
Go Eric.

Michelle Rowan (23:27.739)
Yeah, yeah. So I want to ask you a question. If you I don't know if I want to say if you had to buy a franchise, but if you had the opportunity to buy a franchise, is there a particular brand or a segment of franchising that you feel like speaks to you that gets you excited?

Anneliese Brosch (23:46.478)
Yes, yes. As somebody who has her yoga teacher training certification and is very outdoor focused, and I see a trend when it comes to folks caring about longevity, not just, you know, training for aesthetics, but training for longevity, the sauna slash cold plunge segment.

Michelle Rowan (24:16.063)
Good one.

Anneliese Brosch (24:16.394)
So I know we have a number of clients in that segment, which are awesome. And that's probably where I would go, just because I believe in it.

Michelle Rowan (24:26.855)
I love that we, yeah, we have like the, the IVs, the red lights, the stretching. love that we have chiropractic. Like we've got a lot in that category. think you nailed it with that kind of a wellness longevity, not just like the circuit training or I think the traditional gym type of setups. Good one.

Anneliese Brosch (24:42.232)
Yeah.

Anneliese Brosch (24:46.21)
Yeah, I would say like if they have a sauna and a cold plunge, I'm in.

Michelle Rowan (24:50.759)
Yeah, yeah. I've always thought I don't think I would be a very good franchise owner. I will be honest. I don't know if I've said that to our listeners before, but I tend to understand the rules, but not always want to play by them, which I think would make me a terrible franchisee.

But I think what intrigues me are, one is the, first of all, nothing with food for me, if I'm gonna be honest. I own a brewery outside of franchising. It's so hard. It is dealing with product costs. So I would say anybody that's going into food franchising has to really love the product or the training of young staff, the turnover. Like you are building a culture of people's first time jobs.

Anneliese Brosch (25:19.95)
and then.

Michelle Rowan (25:35.231)
really in a lot of cases. And I think we have a couple of franchisees, maybe we can get them on this podcast about the awesome job that they're doing around that. But I like the stuff around senior care. I think we have aging population in our country and not necessarily great solutions for everybody. That one intrigues me. And we have a former employer, former editorial director, I'll give her a shout out, Molly Rowe. She and her husband, she left here, which made us sad, but it was to become a franchisee. So she owns a First Light.

Anneliese Brosch (25:45.838)
Yeah, that's

Michelle Rowan (26:04.787)
senior care down in the North Shore in your area. And so she's been doing that, I think probably about eight years now and loves it, loves her team, loves what they do. And they're so embedded in their community. It's awesome.

Anneliese Brosch (26:17.13)
Awesome, that's so good to hear. Yeah, the senior care side of things. think there's just a ton of opportunity in the coming years.

Michelle Rowan (26:24.849)
Okay, so we have talked about franchisee satisfaction. We obviously both think it's important because we work here at Franchise Business Review. I think that's fair to say. Do you have any advice for anyone that is thinking about buying a franchise? What would you say to them if they called you and asked you for your thoughts?

Anneliese Brosch (26:41.134)
Ask as many questions as you can.

Michelle Rowan (26:43.677)
Yeah, there's not enough questions.

Anneliese Brosch (26:45.676)
Yeah, ask as many questions as you can. Ask about all kinds of things. Ask about obviously the financials. Ask about what, you know, where the breakeven is as far as years out time. I would say ask about their FPR data. Ask if they have it. And if they do have it, are they willing to share it with you?

Michelle Rowan (27:11.645)
Yeah, that's a good one. And some people will share a lot of it and some will just share a little bit. But I think the point is that they're talking about it and that they're getting feedback from their community so that once you join the community, you can expect that to be one of the ways that they kind of check in with you.

Anneliese Brosch (27:27.744)
I actually have one other thing to add. In what I've seen, I would say especially brands that are growing very, very, very fast. I don't want to say necessarily be skeptical, but if a brand is growing exceptionally fast, ask even more questions. Ask about how they're going to keep the consistency across.

Michelle Rowan (27:29.78)
Yeah.

Anneliese Brosch (27:55.562)
across all of the franchisees ask about what they foresee as their biggest growing pains, moving it to the following years, knowing that they've doubled and tripled in size or whatever it may be.

Michelle Rowan (28:07.815)
Yeah, that's a good one. And also just know if you're joining a system that is fast growing, it can be very, very exciting. But that there is going to be some kind of bumbles as they figure out how to how to support that scale of growth. So I think that there's nothing wrong with joining a fast moving brand. I think we are seeing a lot of that in the food space, specifically with the healthy foods, because they're smaller footprints, because there's less product that they can get these up and running and moving fast.

Anneliese Brosch (28:30.328)
Yeah.

Michelle Rowan (28:36.925)
And I think it can be really exciting. You just have to know it's gonna be a little bit of bumps in how they support you as you grow, which is fine. But again, it's knowing that going into it. I wanna be part of this great product or this great brand that's getting so much traction, but that they might not have it all figured out because they're growing so fast. Yeah.

Anneliese Brosch (28:52.002)
Yeah.

Anneliese Brosch (28:56.992)
Yeah, exactly. Exactly. There's the excitement of being potentially like first to market and within that brand in your particular community. But just just making sure that you're covering all of your bases and you're understanding everything that goes into it.

Michelle Rowan (29:12.915)
Yeah, awesome. So one more thing on franchisee satisfaction that I would share with everyone is the number one question on our survey that actually correlates to a brand that's growing in their FDD. So we look at our data comparative to the growth of a system is the question around, trust my franchisor. So that is more important to current franchise owners than how much money they're making or anything else that is on that survey.

So that I think does correlate just to the general idea of what franchisee satisfaction is. It's that relationship you have with the people that are supporting you and being your cheerleader as you grow your business. So I don't know if you have any parting words for our listeners today, but you are an excellent guest and appreciate your perspective because you are talking to a lot of our customers.

Anneliese Brosch (29:57.954)
Thank you. I really enjoyed my time and hopefully you'll have me some other time. Thanks, Michelle. Bye.

Michelle Rowan (30:02.867)
Heck yes, you're invited back. Thanks, Annalise.