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Success is all about the (franchise) network

For franchisees, data can be a powerful tool
and provide insight into the strategies that
help fellow franchisees at a store level.

Franchisee turnover

When looking at the franchise network one of the biggest considerations to examine is the turnover frequency that occurs within the franchise brand. One will want to get an understanding of the average turnover rate the franchise system experienced in the previous year. If the brand is sitting around 10 per cent, this will provide a good benchmark. If the percentage is higher, it may indicate franchisees are not happy working within a particular system and under a specific brand.

After selecting the franchise, do not forget to lean on the franchisor to help the franchise succeed. A franchisor wants its franchisees to be successful, and there are two areas where that support is going to have the biggest impact—customer engagement and marketing.

Customer engagement

If the franchisor has customer analytics, the franchisee should get their hands on this data! One of the keys to growing a business is by looking at how the customer base is being engaged and then taking that information to look for opportunities to attract new customers. Taking advantage of any analytics that can be provided by the franchisor will serve as a good foundation.

Outside of analytics, one will also want to start to understand the frequency for when customers are visiting, the time spent in the franchise, whether they are new or existing customers, and how many are making a purchase. This will provide a clear picture of the customer base and will present opportunities to start marketing to the demographic groups that frequent the location. Further, when one has an understanding of when clients are coming in, they can look for value-add opportunities (e.g. weekly or monthly specials) to bring them in more often. The more engaged customers are, the more likely they will keep coming back.


The franchisor will often have national or provincial marketing efforts. These initiatives are great for building brand recognition and can be a great asset to a franchisee.

That said, local marketing should not be overlooked. The pocket of a city or town that a franchise serves will have its own unique needs. Social marketing can be an excellent tool for connecting with customers at a local level—it offers another chance to interact with customers one-on-one. It also provides a platform to share curated content and, if a franchisee has a dedicated Facebook page for their business, one can provide the option to respond to customer questions.

As a prospective franchisee, doing the due diligence into the brand itself is crucial. But do not forget to take a look at the bigger picture and dive into the franchise network. It provides a pulse on the overall brand and will give insight into how it can help make the franchise successful.

Joseph Pisani is the director of North American industry sectors, franchise finance for the Bank of Montreal (BMO). For more information, visit www.bmo.com/franchising.

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