Franchise Customer Experience Certification Program Aims To Drive Franchise Growth

Why do some franchise brands make it while others fail? According to FRANdata, 1) approximately 300 companies begin franchising each year in the U.S., and 2) 84% of franchise systems never grow beyond 100 open locations. A recent initiative, the Franchise Customer Experience Certification, seeks to improve the odds of franchisee success. 

According to Jayson Pearl, founder of the certification program, growth stalls for one reason above all others.

“Our research shows that growing past 100 locations—or not—comes down to unit economics,” he says. “Without it, even the most positive and engaged franchisee can’t afford, or won’t choose, to invest in sales and marketing, to add additional units, or to recommend the franchise when prospects call for validation.”

Customer experience excellence is a crucial and often missing element of success, Pearl says. A McKinsey study found that brands with higher customer experience scores can have twice the revenue growth of their peers.

A 30-year franchising veteran, Pearl was inspired to create the certification program after working with Franchise Update Media and the IFA on the Franchise Customer Experience Conference. Two years ago, in May 2022, he assembled a working group of franchisors to explore how customer service performance relates to unit profitability. The group, selected from brands in different industries, all had many years in franchising, consistent growth, and top consumer and franchisee satisfaction scores.

The group began with the hypothesis that profitable unit growth happens when highly satisfied franchisees create highly satisfied consumers. Focusing on franchisee and consumer experience, they set out to identify the most effective practices required to create this virtuous cycle, with the goal of identifying the standards and processes that lead to increased profitability.

The working group met over 18 months to share and analyze their brands’ processes and examine examples across franchising. From this research, they developed a model with franchisee profitability at the core (see graphic). They identified 32 different practices around franchisee and consumer experience that, when active and effective, lead to higher franchisee profitability. The group organized these into five pillars of success: Operationalizing Culture, Defining the Brand Way, Measuring and Improving Consumer Satisfaction, Measuring and Improving Franchisee Satisfaction, and The Profit Path.

In 2023, based on the group’s discoveries, Pearl founded the Franchise Customer Experience Institute to build a certification program for brands seeking to drive faster growth through better consumer and franchisee experiences.

The institute’s team built the processes for validating franchisor practices through a secure online entry portal, franchisee and consumer interviews, and third-party data. The team also created a Franchise Customer Experience Resource Center with research and more than 100 best practices and tools for brand teams to use as they pursue certification.

In November 2023, the institute invited brands from different industries to become certified and contribute their expertise toward improving the program. Participants included Batteries Plus, Fastsigns, Homewatch CareGivers, Massage Heights, My Salon Suite, NerdsToGo, and QC Kinetix. These brands completed their certifications and were recognized with awards in February at the 2024 IFA Annual Convention.

Today, the institute is working with executives for the next round of brands to be certified. Those who achieve certification will be recognized at Franchise Update Media’s Franchise Customer Experience Conference in Atlanta, June 17–20.

“Our mission is to be the trusted resource for helping more fully build the community of franchise brands dedicated to customer experience excellence, learning from each other, and growing to new heights,” Pearl says.

To learn more about how certification works, click here.

The Fastsigns brand leadership team was one of 11 who received the award recognizing their Franchise Customer Experience Certification at the 2024 IFA convention. (Left to right are Chris Becraft, Grant Walker, Andrea Hohermuth, Jeffery Lewis, Scott Krupa, and Lana Daley.)