How Does Franchise Business Review Determine the Top-Rated Franchises? A Look Into the FBR Methodology
Every year, Franchise Business Review surveys thousands of franchisees from hundreds of leading franchise brands to gauge franchisee satisfaction and performance — and to compile our lists of the top-rated franchise brands. Our independent franchisee satisfaction reviews measure the health of franchise systems that participate in our research based exclusively on the feedback of franchise owners... the real franchise experts!
Not all brands willingly open their doors to an independent research firm like Franchise Business Review, but those who do can offer investors, like you, a wealth of information on the system’s leadership, culture, training and support, financial outlook and franchisee community.
The information we gather and distribute is not intended to replace the franchise investigation process that all potential franchisees should engage in. It does, however, provide immediate feedback from existing franchisees about brands you may be interested in. You may be wondering how we carry out our surveys and conduct our research to determine the top-rated franchise brands. Below is a brief explanation of the FBR process and research methodology.
Franchise Business Review Process and Methodology
Eligibility for Participation
In order to participate in our surveys and research, brands must opt in and give us permission to survey the franchisees in their system. Any franchise brand located in the U.S. or Canada with more than 10 units can participate in FBR’s research at no cost.
Once FBR gets the okay to survey franchisees, we contact all franchisees and invite them to take our 33-question survey. During this process we also acquire a brand’s Franchise Disclosure Document (FDD) to verify the franchisee list provided.
Once the survey period is closed, we analyze the collected data from each brand using 33 benchmarking questions (these questions must be included in every brand’s survey in order for them to be considered for recognition).
Scores for each benchmark question are determined using a weighted scale – the most positive response option (such as “excellent” or “strongly agree”) having the most positive effect, and the most negative option having the most negative effect.
For each franchise brand, the collective scores of their franchisees are used to determine a single, overall “FSI” (Franchisee Satisfaction Index) score to determine their ranking among the other participating brands. Other factors contributing to placement on the list are the size of the franchise system, the percent of franchisees that participated in the survey, and age of the survey.
Determining the Top Brands
From the collection of FSI scores, a benchmark is determined, and brands exceeding the benchmark are identified as “top franchises.” There is no fee to be named in our publications, nor can a brand pay for a listing or higher placement on a list.
What Is an FSI Score?
The Franchisee Satisfaction Index (FSI) is the industry standard by which the health of any franchise company can be measured and tracked over time. Established by Franchise Business Review in 2007, FSI is a collective assessment of the critical areas of franchisee satisfaction and engagement.
Franchise Business Review has surveyed over 1,100 franchise brands, representing tens of thousands of franchisees. This data makes our FSI benchmark an extremely powerful tool for evaluating systems, tracking operational performance, and predicting future success.
The FSI measures franchisee satisfaction and engagement in eight key areas:
Training & Support
Successful execution of a franchise business is all about the training, support, and ongoing development that franchisees receive from their franchisor.
Systems & Operations
Proven systems and established operating procedures are part of the foundation of franchising. These are the things that make a franchise system run smoothly, maintain a competitive advantage, and achieve greater success over time.
When it comes to successful leadership of any franchise company, the perception of the franchisees is the reality under which the franchisor has to operate.
Without a basic understanding of trust, honesty, and respect, all business initiatives will meet with significant challenges.
Building a successful business and making money are important, but much of the long-term satisfaction and day-to-day enjoyment of operating a franchise business comes from the relationships formed within the franchisee community.
Part of our 360-degree evaluation of a franchise system includes an honest self-assessment of performance by franchisees.
While the long-term financial goals of franchisees vary widely, making a living and earning a reasonable return on their investment are things that most share in common. Financial success is a primary driver of overall satisfaction.
General satisfaction is where the rubber meets the road. Has the everyday experience of owning a franchise lived up to the expectations of the franchisees? Would they recommend this franchise to others? And most importantly, would they do it again?
FSI can range from 0 to 100 and represents a weighted sum of positive responses to a specific question or a group of questions within one of the areas being measured for satisfaction. If you were to simply add up all the positive responses to a question, giving the same value to an “excellent” response that you give to a “good” or “very good” response, you would paint an overly optimistic picture. FSI provides a realistic view of favorable satisfaction ratings by weighting more positive responses and discounting lesser responses to any given question.
FSI ratings provide a reference point or benchmark to help gauge the overall level of franchisee satisfaction or satisfaction in a specific area. While an FSI of 66.2% on its own is not all that valuable, using it as a benchmark to measure against other areas, or to compare various franchise systems and industry sectors, is extremely useful.
Now that you have a better understanding as to how we research and rate franchise brands, you’re probably curious who made this year’s list! You can view this year’s top rated brands here.