In June, a Quebec court delivered an unprecedented victory to franchisees of the Dunkin’ Donuts brand. The court said that the Dunkin’ Donuts franchisor had not done enough to support the brand in Quebec, particularly in light of the growing “Tim Hortons phenomenon” in that province – leading to financial harm to its franchisees. The judge awarded damages of a cool $16.4 million dollars against the franchisor.
The facts of the court case were specific and complex. Interested readers will find an enlightening explanation of the key issues in an article by Ned Levitt and Bruce Schaeffer in the September 2012 issue of CCH Business Franchise Guide. Whatever the future impact of that case on franchise law, it put a spotlight on the expectations and needs of franchisees in banking their career’s future on a brand.
CorbinPartners set out to survey franchisees of brandname pizza companies doing business in the GTA and surrounding areas to learn about their perceptions of the support they receive from their franchisor, and their level of satisfaction with the relationship. Telephone surveys were carried out. Particular cooperation was received from franchisees of Domino’s Pizza and Gino’s Pizza. Here are a few highlights of what CorbinPartners found.
While a slight majority (53%) of all franchisees surveyed claimed to be satisfied overall with the level of support they received, more than a third (37%) directly expressed dissatisfaction. Domino’s franchisees showed the highest level of satisfaction (80%). Another question seemed to explain the difference. When asked whether they viewed their association with their franchisor “more as a client/owner relationship or as a business partner relationship?” the Domino’s franchisees chose “business partner relationship” far more frequently than others.
Across all franchisees interviewed, the most frequently expressed wishes for additional support were in the areas of promotional support for the brand, and more actionoriented information about customers. One franchisee said his company should seek out “better understanding of the market, better market research thus translating into more competitive marketing, more cutting edge marketing.”
Also frequently mentioned was a wish for better communication and a better understanding of the needs of individual franchise locations. “They’ve got to put themselves in our boots and see what our problems are as franchisees.” … “Interact with the franchisees more often, have meetings with franchisees and see things from our point of view as well.”
A survey of pizza franchisees is the first step in a broader analysis of the franchising marketplace, to help brand franchisors understand what it takes to attract and maintain the best entrepreneurs for their front lines. As Dunkin’ Donuts discovered too late, understanding and addressing any sources of dissatisfaction among franchisees can help to avoid costly and embarrassing showdowns in the future. It all goes back to enhancing and protecting the value of the brand. And as successful franchisors already know, that’s just plain good for business.
Fiona Isaacson, CorbinPartners Inc.