To enter this website, you must read and agree to bound by the terms of the conditions of use of this website
Harnessing high performing franchisee marketing prowess
Written on the 20 May 2009 by Fiona Taylor
High performing franchisees have advanced marketing systems hidden to both themselves and their franchisors, research by the Asia-Pacific Centre for Franchising Excellence has revealed.
Professor of Marketing Bill Merrilees and Centre Director Professor Lorelle Frazer explored differences between high and average performing franchisees to identify if there were similarities.
Franchisees were ranked in terms of sales turnover and franchisee profitability with top performers rated in the top 20 per cent and average performers in the middle third of each franchise system.
Professor Merrilees said similarities emerged in high performing franchisees across different franchise systems.
“Three key areas high performing franchisees are more active or sophisticated in their approach than average performing franchisees are type of franchisor services used, marketing capabilities and management capabilities,” Professor Merrilees said.
“Interestingly high achieving franchisees seem unaware of their advanced marketing systems and special abilities — which is remarkable.”
High Performing Franchisee Characteristics
High performing franchisees set and exceed performance targets, have a strong work ethic, are more confident and see setbacks as opportunities.
They request marketing and branding support from the franchisor, whereas average performers focus more on operational support.
They also act as mentors to other franchisees as they don’t feel they are in direct competition, viewing the franchise system as a whole rather than their unit in isolation.
Franchisee Marketing Skills
High performing franchisees are proactive at cross-selling, developing and managing loyal customers, focus on high profit margin sales, work closer with the franchisor and proactively grow the business.
“By focusing on quality not quantity high performing franchisees create a greater rate of return on time invested helping to increase their profitability,” Professor Merrilees said.
Franchisee Management Skills
Management skills also enhance franchisee profitability, with differences between high performing franchisees and average performing franchisees leading to productivity differences of between 25 – 50 per cent.
Professor Merrilees said high performers used better techniques enabling higher quality and quicker service, efficient job scheduling and planning, and asset and expense management processes.
“High performers pay more attention to costs and stock control and are likely to use a more detailed accounting system to control costs and plan cash flow expenditure,” Professor Merrilees said.
Harnessing Franchisee Skills
“There is a great opportunity to improve franchisee marketing-performance by greater recognition and incorporation of advanced marketing systems devised by successful franchisees,” he said.
“Greater levels of awareness of the exact nature of marketing and management systems can assist with improving the performance of other franchise units and the franchise system.
“Training high performing franchisees as mentors would also further enhance profitability.”
The research was funded by the Griffith Business School.
Author: Fiona Taylor