What franchises need to know about managing customer satisfaction
Franchises allow entrepreneurs to try their hand at business ownership while gaining the huge advantage of working off a proven brand and operating model. But it’s not always smooth sailing. Sometimes the lines of business are blurred and miscommunication about who is responsible for what can lead to customer satisfaction issues.
Just like individual store locations are part of a bigger corporate entity, franchises are responsible for maintaining their own guidelines while adhering to a certain overarching standard by the franchisor.
In this post, we break down some of the most frequently asked questions and share high-level observations about how you can maintain — and improve — satisfaction in a franchise environment.
Q: In a franchise system, who is responsible for managing customer satisfaction? Is it the responsibility of the franchisee or the franchisor (or both)?
A: It’s both. Ultimately the franchisee needs to be successful, but guidance comes from above. Franchisees must adhere to corporate guidelines that can’t be changed, such as signage and regulations, but can still be thought of as individual storefronts within a larger system. While the franchise model is technically different than a store brand model, the customer satisfaction aspects are no different for a store that isn’t franchised. There’s still a manager for each location, and they’re still responsible for profits, services, employee training, etc.
The model isn’t influencing customer satisfaction — whether you’re in a corporate environment like Home Depot or a franchisee like McDonald’s, it’s the same kind of things that create a satisfying experience.
Q: Should the franchisor assist franchisees with satisfaction, particularly in local markets? If so, how?
A: The franchisor should provide standard best practices and procedures required of all franchisees to ensure an enjoyable experience. It’s also recommended that franchisors share guidelines that ensure uniformity in the quality of experiences. For example, Chick-fil-A is really controlling, right down to its waffle fries, which need to look and taste exactly the same to all customers.
While the franchise may be “local,” it still has to adhere to national standards.
Q: How can the franchisor incentivize franchisees to improve satisfaction?
A: Customer satisfaction should be incentive enough. As the ACSI has found across all industries, higher customer satisfaction leads to higher profits. However, there wouldn’t be anything wrong with incentivizing customer satisfaction even more.
Q: Could low satisfaction with individual franchises impact the brand’s reputation or satisfaction, and vice versa?
A: It’s likely the reputation of one franchise location would be too small to impact the overall brand. Isolated customer incidents, like food poisoning at one location, most likely won’t impact customer satisfaction on a larger scale — at least in terms of ACSI — because not enough customers would’ve directly experienced the issue.
Individual locations might influence satisfaction if the incident is substantial enough or spans across multiple locations. For example, numerous Chipotle locations served tainted pork that made their customers sick, and we did see this impact satisfaction across the board.
Q: How do franchises ensure uniform and consistent satisfaction? Do they need to cater to certain geographic preferences, or are there other ways to stand out while still ensuring brand standards are in place?
A: It makes business sense for a franchisor to look at the customer satisfaction of their franchisees. Corporate could perform detailed surveying based on objective measurement for every location to identify the top performers and then pull best practices out of that location as a model for all others. The same could be done for the bottom performers to identify harmful practices and share those within the system.
There are differences in customer satisfaction based on geography, so surveys could reveal even more about regional discrepancies and tastes.
Q: Should franchisors have uniform satisfaction measurement tools across locations? How else can they ensure consistency?
A: Franchisors should absolutely set the standard for satisfaction. The key is to establish criteria like courtesy of staff, food quality, cleanliness, accuracy of orders, etc. and then implement the metrics across all franchises. This will help franchisors benchmark, identify best-in-class performers to be emulated, and identify under-performers to target for specific improvement strategies. Measurement should ideally occur monthly, but at the very least quarterly.
Furthermore, it’s advisable for franchisors to not only measure, but also enforce customer satisfaction best practices. There needs to be a way to ensure consistency of brand standards across all franchisees. One way to ensure consistency might be to revoke a franchise if they aren’t consistent with standards, or at least give them a warning and step in to evaluate what could be improved. There’s also the option to take additional disciplinary action, like a fine, if there are multiple infractions.
Q: Does customer satisfaction among franchises differ across industries? For example, retail franchises vs. restaurant franchises?
A: There are always nuances in satisfaction from industry to industry, but overall there are some key observations that ring true for most organizations. The major franchise industries are hotels and fast food restaurants, so that helps narrow down the demographics a bit.
Q: What’s the number one thing franchises need to keep in mind regarding customer satisfaction?
A: Like any company, franchises need to focus on employee satisfaction. Customers will have the same expectations at each franchise location, so franchisees need to be prepared to satisfy them — and employees are on the front lines, so they need to be adequately trained and supported. Happier employees tend to result in happier customers, which means better bottom lines.
Q: Can you give an example of a franchise system and how customer satisfaction is impacted across multiple locations?
A: Take Papa Johns, for example. One thing to consider is that any challenges with corporate or the brand don’t necessarily impact customer satisfaction ratings; that doesn’t change the pizza quality, and that’s what matters more to customers.
Ultimately, customers aren’t aware of whether they’re being served by a franchise or a corporate branch, nor do they really care. It’s important for any business to create a uniform, pleasing experience to meet the customer’s expectations.
Every location and person representing the brand — whether at the franchisor or the franchisee level — is responsible for maintaining a certain set of standards to ensure customers are happy with the service.
If you’re a franchise interested in understanding more about these satisfaction nuances or how you can improve customer service among your franchised locations, please reach out to Tina Dettloff at tdettloff(at)theacsi(dot)org.