I was recently asked, what is the most important question to ask if you want to determine if a franchise is a good investment? The answer to me was so clear from my experience as a franchisor and as a consultant.
The ultimate question is . . .
What percentage of your franchisees attend your annual convention?
A Franchising Mistake to Avoid
Don’t get lazy about getting your franchisees to attend.
When I was an executive at a franchisor operating five different brands, we always panicked when we got below 90% attendance. One reason is that the amount of time and energy that it would take for us to educate non-attendees was incredibly time-consuming and expensive, and usually not effective. What really got me upset was that our staff was rewarding people who didn’t go by holding their hands and giving them private updates. It is always far more effective to work with your franchisees who attended your convention to help them improve their businesses because they got it and were well informed.
The Impact of Convention Attendance: A Dual Perspective
For Franchisors, achieving less than 90% attendance is a red flag, signaling a disconnect that could lead to a cascade of problems, including the cumbersome and often ineffective process of trying to relay critical updates and innovations to absentees. This not only demands considerable resources but also dilutes the potential for uniform advancement across the franchise.
For Franchisees, the difference in performance between those who attend and those who don’t is stark. Data consistently shows that franchisees who participate in conventions experience notable sales growth, often in the double digits better than those of their non-attending counterparts This discrepancy underscores not just the opportunity cost of absence but the tangible impact on bottom-line results. your last conferences.
The Measurable Impact of Attendance on Sales Growth
I always ask the franchisors I work with to measure sales growth for a year after the convention, comparing those who attended and those who did not. Normally, I find something like sales were up 11% for those who attended and down 9% for those who did not. Can you afford not to get the benefit of those increased sales? Look at your own franchise system and compare the growth rates of people who attend versus those who didn’t attend.
More Positives of High Attendance
- Enhanced Franchisee Engagement – High attendance fosters a sense of belonging and commitment among franchisees, strengthening their engagement with the brand and its values.
- Unified Vision and Direction – Conventions are an opportunity to align franchisees with the franchisor’s vision, ensuring everyone is moving in the same direction for growth and success.
- Networking and Peer Learning – High attendance maximizes opportunities for franchisees to network, share best practices, and learn from each other’s experiences, fostering a collaborative culture.
- Training and Development – Conventions serve as a platform for training and professional development. High attendance ensures franchisees are up to date with the latest industry trends, technologies, and operational standards.
- Feedback and Innovation – With more attendees, franchisors can gather a broader range of feedback and ideas, fueling innovation and addressing areas needing improvement.
- Celebrating Success – Conventions allow for the recognition of franchisees’ achievements, motivating the entire system by highlighting success stories and best practices.
- Vendor and Partner Relationships – Conventions often feature vendors and partners critical to the franchise’s operations. High attendance ensures franchisees are exposed to the latest products, services, and technologies that can drive their businesses forward.
Harms of Low Attendance
- Missed Opportunities for Alignment – Low attendance at a franchise convention can result in a lack of uniformity and consistency across the franchise system, as not all franchisees will be equally informed or motivated.
- Weakened Franchise Culture – Low attendance undermines the building of a strong, cohesive franchise culture. It limits the opportunities for franchisees to bond, share experiences, and build a collective identity.
- Slower Response to Market Changes – When attendance is low, the adoption of new strategies, technologies, or operational changes may be slower, putting the entire franchise at a competitive disadvantage.
Why Do Franchisees Not Want to Attend?
There are varied reasons for low attendance. In one case franchisees reported to me that the event was a “drunk fest.” In another case, a franchisee explained to me that the person who sold them the franchise said it wasn’t necessary to attend the convention, so they just never went. And franchisees who tend to be introverted can feel uncomfortable and isolated at conventions.
But here’s an interesting thing. Those who attend conventions love them, so it’s hard for you to envision why anybody won’t attend. But there are reasons, and it’s important to get an outsider or consultant who can speak confidentially with franchisees to understand the real issues at hand.
In one case I worked with a client who had 20% attendance at their conventions. After interviewing a reasonable representation of people who attended all the time, those who attended sometimes and those who never attended, I was able to help the franchisor develop a much more interactive convention format that focused on listening to franchisees, not telling them what to do. With that change in philosophy toward communication, that franchise achieved 85% attendance and could have had more, except they ran out of hotel space.
In Summary . . .
Thinking about the opening of this article, if I were choosing a franchise system to invest in, I’d want one with extremely high attendance at their conventions. And if I were a franchisor who had low attendance, I’d want to fix that issue, not just because it’s good for selling franchises, but because it’s a difference maker in success.
About Evan Hackel
As author, speaker and entrepreneur, Evan has been instrumental in launching more than 20 businesses and has managed a portfolio of brands with systemwide sales of more than $5 billion. He is the creator of Ingaged Leadership, is author of the book Ingaging Leadership: The Ultimate Edition and is a thought leader in the fields of leadership and success.
Evan is the CEO of Ingage Consulting, Delta Payment Systems, and an advisor to Tortal Training. Reach Evan at ehackel@ingagen.net, 781-820-7609 or visit www.evanhackel.com.