FranConnect, the leading provider of franchise management software, announced the release of its FranConnect Franchise Sales Index Report for 2020, the most complete and authoritative source of data, analytics and insights into the current state of Franchise sales. Now in its fifth year, the report reveals critical best practices relevant for franchise operators looking to confront the economic reality of the pandemic.
This year’s edition of the report benchmarks anonymized and aggregated data from 597 franchise brands representing the nine vertical markets consisting of Personal Services, Quick Service and Fast Casual Restaurants (QSR), Table/Full-Service Restaurants, Lodging, Retail Food, Retail Products & Services, Real Estate, Business Services, and Commercial & Residential Services.
“This year’s report confirms that there was already a notable decline in franchise sales leads before the pandemic, the result of a then full-employment economy. And now, with unemployment rates having skyrocketed, there is going to be a rush by those impacted as they seek new opportunities and a sense of control in these turbulent times,” said Keith Gerson, CFE, President of Franchise Operations at FranConnect. “What the pandemic has accomplished is to reveal the cracks that already existed in many franchise sales programs and systems.”
Some of the most important findings gleaned from the report serves as a guidepost to improved sales effectiveness:
- Total average lead volume per brand fell 12% year-over-year, likely due to the effects of 2019’s full-employment economy; but some sectors fared better than others;
- The overall deal closure rate (lead-to-deal ratio) decreased by 10% year-over-year, as Franchise Development teams struggled with stronger competition for a smaller overall pool of leads;
- Franchise Portals generated the most leads, while ranking fourth in terms of closed deals;
- Referrals and Brokers proved to be considerably more effective at helping to close deals, based on lead-to-sales conversion rates, relative to the prior year;
- 85% of the leads that resulted in deals were those that were contacted within the first four hours of their inquiry, demonstrating the power of “speed to the lead”;
- Lead follow-up processes are not implemented sufficiently in most organizations, as nearly three-quarters of all leads failed to receive meaningful responses.