Franchisors, Don’t be Scared of Reviews

Many franchisors are understandably concerned about receiving negative reviews. However, my experience has shown that both positive and negative reviews can be extremely valuable when viewed as performance indicators rather than risks.

Customer reviews often provide the earliest signal of how a franchisee’s business is performing and how customers are being treated. I have experienced this firsthand on several occasions. In one example, a franchisee had received hundreds of five-star reviews over a four-year period. His business was performing exceptionally well, generating consistent work from loyal customers and strong lead flow in his territory. As a result, very little marketing investment was required from the franchisor to maintain high-quality leads.

However, within a three-month period the situation changed dramatically, with the franchisee receiving more than 20 one- and two-star reviews. In hindsight, I should have addressed the issue after the first four or five poor reviews appeared. Early intervention may have allowed the franchisee to correct the underlying problems.

Instead, by the time I met with the franchisee three months later, the situation had deteriorated significantly. Work from regular clients had declined, new leads in the territory had reduced, marketing costs had increased well above average, and the business itself was struggling. Ultimately, I had no option but to terminate the franchise agreement. Had the early warning signs from those initial reviews been addressed sooner, the outcome may have been very different.

This experience reinforced several key benefits of actively monitoring and embracing customer reviews:

1. Reviews are often the earliest indicator of how a franchisee’s business is performing.
2. They provide insight into how customers are being treated.
3. They allow franchisors to identify issues early and intervene before problems escalate.
4. Positive reviews improve online visibility and generate stronger word-of-mouth referrals, often reducing marketing costs.
5. Negative reviews highlight areas where additional training or support may be required.
6. When franchisees know customers can rate their performance, they are generally more motivated to maintain high standards.
7. Reviews reinforce the importance of accountability and operational standards within the network.

Most importantly, customer feedback provides valuable insight into changing customer expectations and demographics. When used effectively, this information helps generate more work, attract better customers, improve franchisee performance, and reduce marketing expenditure. Ultimately, this creates stronger profitability for both franchisors and franchisees.

About the Author

Tino Grossi

Director of Franchise Development

Ultrabrands.ca

Tino is an experienced executive with over 15 years of experience in the franchise industry, including senior positions in franchise organizations including roles as COO and CEO of the Jim’s Group (Australia, New Zealand and Canada).