State of Franchise Development - 2017
It seems like 2017 is shaping up to be a very different year than 2016 when it comes to franchise development. Last year we heard from a number of franchisors that they were struggling to hit their development goals, and that seemed to be the case with nearly 50% of franchisors reporting that they finished short of their 2016 goals. This year it seems like franchisors are off to a much better start with 60% of the franchisors we heard from expecting to hit or exceed their goals. But even still, no one we heard from is exactly thrilled with their development efforts.
Achieving Goals
The core questions of our 2017 Development Survey focused on whether or not franchisors felt as if they were on pace to hit their annual development goals, based on sales YTD and projected sales over the remainder of the year. 60% of respondents answered that they were on pace to meet or exceed their goals (with top respondents pacing to nearly double their growth goals for the year).
But everything isn't performing perfectly this year. More than 75% of franchisors who said they did not expect to make their 2017 goals actually didn't expect to be able to hit 75% of their development targets. It seems like there is a major divide between 2017 being an extremely successful year and an extremely frustrating year.
Digital Continues to Rise
Perhaps one of the most surprising results from this year's survey was the dominance of digital sources as lead generation methods. Print, brokers, and trade shows continue to feature in several development plans, but not nearly with the ubiquity of SEM, display advertising, social media advertising, and portal advertising. At least 70% of respondents listed that they were using each of those sources. We expect that this will continue to grow as we move into 2018.
Success Doesn't Mean Satisfaction
Despite 60% of franchisors pacing to hit their goals, not a single franchisor who responded said that they were fully satisfied with their lead generation sources this year. In fact 50% of respondents surveyed said they were actively unsatisfied with their lead generation efforts. The reasons ranged from general issues around quality to concerns around cost, but overall the theme remained. Even those who were hitting their goals thought that the process could be improved.
Care to share your thoughts about how your development effort is going this year? Let us know!
This is going to be an updated report as we hear from more and more franchisors, so please feel free to reach out with more information about how you feel about your 2017 sales year (email Tim@FranchiseHelp.com or Vesh@FranchiseHelp.com)!
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