The pandemic has been a game-changer for restaurants, forcing everyone, including quick-service operators, to rethink everything they do. It’s the restaurants that pivoted fastest and most efficiently that have emerged from the health crisis in the best financial shape.
This we can all agree on.
But what we’ve learned is that one of the biggest factors why some food franchises succeeded and why others failed during COVID has been largely ignored. Recent research shows that it was those that were able to maintain strong relationships with their franchise operators in the last year and half that have come out ahead.
It’s no accident that restaurant franchises that put in place proven support and training systems for their franchise owners before COVID, and then provided them timely and effective direction on securing PPP loans and took the lead on renegotiating leases during the pandemic, were positioned best to succeed. Many of them have even been able to grow their operations in the last 18 months because they were able to maintain high satisfaction ratings with their franchise owners.
Our research reveals that a critical component to building a healthy franchise system is keeping restaurant operators engaged and motivated. It has a direct and measurable impact on performance and profitability. When you have satisfied franchise owners operating your restaurants, your overall system performance improves dramatically. You reduce support costs, increase same store growth, sell more franchise units and territories to your existing owners, and attract new investors interested in buying franchises.
Engaged franchisees are more likely to be passionate about the business and feel a deep connection to the franchise. They see themselves as partners in the business and actively take ownership for the success of the brand.
In our most recent Franchisee Satisfaction Study, Franchise Business Review found that brands with high franchisee satisfaction scores significantly outperform brands with low satisfaction on every key performance metric.
During the early stages of COVID, when many restaurants were forced to shut down, large quick-service food franchises, such as A&W Restaurants and Checkers & Rally’s, provided clear and effective direction to its store operators on how to best navigate the pandemic challenges. Smaller but emerging brands such as Clean Juice and Another Broken Egg, meanwhile, scheduled weekly video meetings with their franchisees, which went a long way toward building loyalty.
It should be pointed out that Clean Juice, the first USDA-certified organic juice bar in the nation that recently secured Tim Tebow as its spokesperson, opened its 100th store within four years of franchising in 2020. Another Broken Egg, a full-service concept that successfully pivoted toward delivery and pickup in the early stages of the pandemic, meanwhile, has been rapidly building momentum in 2021. They have had seven new cafe openings already this year and have another four planned by the end of the year, as well as agreements signed to open an additional 14 locations.
Not all food franchises are created equal. What we have found is that what often differentiates the top performing franchises from the poor performing franchises is the training and assistance provided franchise owners to not only get their business up and running, but keep it growing. Even when things go bad, like they have in the last 18 months, the franchisees from FBR’s Top Food Franchises knew corporate had their backs.
Data from Franchise Business Review’s 2021 Top Food Franchises List, which is based on independent survey results from over 10,200 franchise owners, representing mainly quick-service food franchises, is very telling. It shows that 88 percent of franchise owners from the 30 award-winning companies said they would recommend their brand to others, compared to just 54 percent of the franchisees surveyed who owned brands not on the list.
Other key findings from the award-winning franchises include:
- 85 percent of the operators said they enjoy being part of their franchise organization
- 84 percent gave their brand high marks for communication and handling of the pandemic
- 82 percent said they respect their franchisor
And it should be pointed out, that even during the pandemic, 72 percent of the franchise owners from the award-winning brands indicated they were still optimistic about meeting their business goals. That’s impressive.
The data provides invaluable insight into the food franchises that were best able to operate in one of the hardest-hit sectors during the pandemic. Food operators from the award-winning brands told us that they were kept regularly updated on new products and services and technology upgrades from corporate to help them navigate a rapidly changing marketplace. They were also given access to virtual discussion rooms with other operators to share best practices.
It was the food franchises that kept their franchisees engaged, informed, and satisfied with their brand in the last year and half of the pandemic that really had the best chance to succeed.
Eric Stites is the founder and CEO of Franchise Business Review, the leading market research firm in the franchise sector, helping to identify today's top franchise opportunities, based exclusively on franchisee satisfaction and performance. For more information, visit: https://franchisebusinessreview.com/