Franchise Update Magazine Issue IV, 2016 | Page 32
BY EDDY GOLDBERG
2017AFDR
IT’S BENCHMARKING TIME!
R
167 BRANDS DELIVER ACTIONABLE RECRUITMENT DATA
esults from the 2017 Annual Franchise Development
Report (AFDR) were unveiled in late September at
the 18th annual Franchise Leadership & Development
Conference in Atlanta. The 2017 AFDR is based on responses
from 16 7 franchisors representing 60,989 units (51,789 franchised and 9,200 company-owned).
Participants in the survey consisted of franchisors that completed an online questionnaire. Responses were aggregated
and analyzed to produce a detailed look into the recruitment
and development practices, budgets, and strategies of a wide
cross-section of franchisors. The data and accompanying commentary and analysis provide the basis of the 2017 AFDR.
Highlights from the report were presented in a general
session at the conference by Franchise Update Media CEO
Therese Thilgen. Among her observations based on the
AFDR data were:
• Franchisees are getting younger. Are you prepared?
• The two most important factors for development are
franchisee validation and a strong sales process.
2017 ANNUAL
FRANCHISE
DEVELOPMENT
REPORT
PRODUCED BY
30
• Recruitment budgets were up in 2016.
• Half of ad spending for recruitment is for digital.
• Four in 10 brands still don’t track cost per lead or cost
per sale.
• 44 percent of food brands exceeded their goals in 2016.
• International expansion for U.S. brands continues to grow.
Growth plans for 2017 from the 167 respondents target
a total of 6,536 additional franchise units, 1,966 through existing franchisees and 3,843 from new franchisees. For comparison, last year’s growth plans from 134 brands targeted a
total of 6,442 additional units; and for 2015 those numbers
were 6,063 total new units from 139 brands.
Below are additional highlights from the 2017 AFDR. Ordering information can be found on page 33.
• Recruitment budgets. Average budget plans for 2017
for franchise sales and recruitment (advertising and media
expenses, not including brokers and employee compensation)
among respondents was $181,510, with a median of $125,000.
This is an increase from last year, when the corresponding
numbers were $162,821 and $120,000. This could indicate
more intense competition not only for quality candidates, but
also higher internal costs stemming from salaries and commissions for the best salespeople.
• Where the money goes. Planned allocation of respondents’ 2017 recruitment budgets remained essentially
the same as in previous years, with some variation in print
and trade show spending. At 49 percent, spending on digital
continues to increase and is expected to continue growing
and account for half or more of all recruitment spending next
year as prospects’ use of mobile devices to explore franchise
opportunities continues on its own growth trajectory. Spending on print has stabilized after a few years of decline, while
budgeting for trade shows (17 percent) and public relations
(13 percent) remained about level with 2016.
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