New Research on whether franchisees peform better has been conducted by the Franchise Relationships Institute (FRI), and was aimed at testing a common belief in the franchising sector that franchised stores perform better than company operated stores under similar conditions.
Research Director of the FRI, Greg Nathan, says that “Most franchisors enthusiastically talk of stores achieving an immediate lift in sales of over 20% when they change from being managed by the company to being operated by a franchisee.”
“Franchisors and franchise consultants also regularly claim that franchisee operated stores outperform company stores due to the “skin in the game” factor where franchisees invest their own money in a business and are responsible for its profits or losses,” he said.