Franchise Update Magazine Issue IV, 2014 | Page 42

Grow Market Lead

ing cost per sale—the most important metric for a franchise
development department—more than half (52 percent) said
they don’t. That compares with 4 in 10 in 2013 and 2 out of 3
(65 percent) in 2012. Excluding broker fees, average cost per
sales in 2014 was $9,142.
• Mobile. The percentage of prospects making contact using their phones almost doubled from August 2013 to August
2014 (23 percent to 42 percent), according to research conducted by Landmark Interactive. Contact made using desktop
computers fell from two-thirds (65 percent) in August 2013 to
less than half (46 percent), mirroring the ongoing shift to the
use of smartphones in everyday life. Tablet use held steady at
1 in 10 (12 percent). In August 2012, those numbers were 10
percent for phones, 8 percent for tablets, and 83 percent for
desktops. The message here for franchisors is that they must
adapt their franchise development websites in response to the
expanding use of mobile devices.

• Brokers. About half (49 percent) reported that they use
franchise broker networks (78 percent used broker firms and 74
percent used independent/local brokers or consultants). That
compares with 48 percent last year and 44 percent in 2012.
The average commission fee per deal in 2014 was $15,146
from broker firms and $11,750 from independent brokers/
consultants. However, in the experience of the panelists, those
numbers seemed low. “I don’t know a single franchisor paying
less than $25,000,” said Wood, unless they were in packages
of five. “Just signing up with a broker isn’t enough,” added
Coley. “Take them out to dinner. Make them understand what
your brand is about.” Brokers are not for everyone. They will
perform better or worse depending on a brand’s investment

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level and the sector they operate in. On average, respondents
expect to close 11.3 deals through broker firms and 8.3 deals
through independent brokers/consultants in 2015.
• Website response. This portion of the AFDR’s mystery
shopping was conducted by Luis Zuniga, Mile Marker 10, who
researched 140 brands. The results were not encouraging, by
any stretch of the imagination. Comparing this year’s results
with those of the three previous surveys finds mixed results. The
number of franchisors responding by phone to the qualified
prospect within 24 hours rose from 21 percent in 2013 to 35
percent in 2014. However, this number also means two out of
three took longer—if they responded at all. The number who
never sent an email to the prospect rose from 22 percent to
36 percent (although this was down from 49 percent in 2012),
while those who never called back to the qualified prospect
rose from 52 percent to 63 percent!

• Website/social performance. Process Peak conducted
this portion of the mystery shopping, examining the websites
of 147 franchise brands to evaluate how well they are using
their online presence to grow their brand and manage their
reputation. Although the percentage of franchise brands with
mobile-friendly websites doubled compared with the previous year, only 4 in 10 (43 percent) had taken the steps to make
their websites mobile-friendly. Use of click-to-call technology
is another area for improvement: just 30 percent offered it on
their websites. Process Peak’s Jon Carlston noted that franchisors are doing a “great job” of getting their websites to appear
on Google’s first search results page, but are not doing a great
job using social channels as an additional way to promote their
franchise opportunity.