2023 AFDR Highlights, Part 7: Franchisors Exceeding Their Goals

Highlights from the 2023 Annual Franchise Development Report (AFDR) were unveiled at the Franchise Leadership & Development Conference (FLDC).

Participants consisted of franchisors that completed an in-depth questionnaire online. Responses were aggregated and analyzed to produce a detailed look into the recruitment and development practices, budgets, spending allocations, and strategies of a wide cross-section of franchisors. The data and accompanying commentary and analysis provided the basis for the 2023 AFDR.

A total of 101 franchisors participated, representing 21,802 franchised units and 2,044 company-owned units. Despite predictions of a recessionary year ahead, participants plan to open a total of 1,725 new franchised units in 2023.

Highlights from the report were presented in an FLDC general session by Franchise Update Media EVP and Chief Content Officer Diane Phibbs and Wild Birds Unlimited Chief Development Officer Paul Pickett. Below is the last in the series of selected highlights. All conference attendees received a complimentary copy of the 2023 AFDR.

Franchisors Exceeding Goals

More than 9 out of 10 franchisors (92%) who exceeded their goals said that their lead quality was up or the same. Additionally, although 50% of those exceeding their goals used brokers, their cost per lead was still $100 less than franchise brands that fell below their annual goal. The “exceeders” also tended to close deals from multiple sources.

Among this group, metrics mattered: 83% tracked cost per lead, 82% tracked cost per sale, and 92% reported that their recruitment budget for the year either increased or stayed the same. As the old saying goes: If you can’t measure it, you can’t control it.

The clear leader, as reported, for lead sources that led to closed deals were brands’ franchise development websites. Next, in descending order, were digital sources, referrals, brokers, trade shows, email marketing, public relations, print, and direct mail.

Two other programs practiced by the “exceeders” could be of interest to brands seeking to expand their prospect pool: 73% had a formal resale program, and 67% had a program to recruit new franchisees for transfers.

Finally, we asked this group about their lead sources for closed deals. Attribution is always an elusive, moving target, often multichannel. Did your prospect hear about your brand on the radio? On TV? On a billboard while driving? Through a friend? Or maybe they ate in your restaurant, had their car repaired, or their kitchen renovated by a franchisee of your brand. So, when it comes down to it, do you really know?