An Australian franchisee’s satisfaction with their business was likely to be based on how well the franchise’s structures were set up, as new research shows franchisees were more satisfied with lower cost franchises and their systems.
Franchise Business Review surveyed over 11,000 franchisees in the US involved in 145 franchise systems. Franchises had to have more than 10 franchisees and cost franchisees less than $US100,000 to launch.
The study found low-cost concepts were more satisfying for franchisees with satisfaction based on a variety of factors including financial opportunity, training and support, leadership, operations, core values and franchisees community.
Michelle Rowan, president of the US’s Franchise Business Review, says in a statement: “Low-cost franchisees rated their systems higher in every category of our survey, and the overall satisfaction of all low-cost franchisees we surveyed was higher than we see in opportunities costing more than US$100,000.”
Kim de Brytt, chief operating officer at the Franchise Council of Australia, told StartupSmart franchise price and franchisor size wasn’t a good indicator of the likelihood of franchisee satisfaction.
“The way the franchise system is set up matters. VIP Franchising has in excess of a thousand franchisees, but the feedback I keep hearing is they’re happy because the structures are in place,” de Brytt says.
“The other issue is some people go into the franchise without really investigating it enough and knowing exactly what they’re getting into.”
The most significant difference pinpointed in the US report was around satisfaction with training and support. The lower-cost franchisees rated their franchise systems 12% higher than franchisees engaged in more expensive systems.
The research also revealed the top 100 American franchise systems, according to franchisee satisfaction. Many were in the aged care or home maintenance industries.
According to de Brytt, single person franchising was on the rise and likely to continue in Australia.
“A lot of small investment franchisees do home maintenance and they’re really satisfied. They love working their own hours and being flexible,” she says.
“As society’s needs change, entrepreneurs innovate and supply that need,” says de Brytt, citing the ongoing trend of outsourcing house work and Australia’s ageing population.
For aspiring franchisees, de Brytt added the benefit for single person franchise companies is the support from head office, which an independent entrepreneur wouldn’t have; but they needed to be aware as a single person franchise, a day off was a day off their business and making money.
This article first appeared on StartupSmart.
Rose is the current head of growth at Rampersand Ventures. She was formerly a reporter at StartupSmart.
