Franchisee insurance program drives 14% revenue growth over four years

The challenge

A fast-food franchisor was under pressure to provide its franchisees with cost-effective insurance, a task complicated by frequent requests from franchisees for price and product comparisons. Additionally, the franchisor struggled with handling a high volume of claims on behalf of its franchisees, particularly those related to machinery breakdowns that were increasingly impacting franchisees’ operational efficiency and customer satisfaction.

The solution

Marsh partnered with the franchisor to design a comprehensive and tailored insurance program aimed at addressing its franchisees’ challenges. Insurance solutions for individual businesses in the fast-food sector are becoming more difficult to secure for a range of reasons, not least due to the construction specifics of many properties and the presence of EPS (expanded polystyrene material) used to insulate food products. This means businesses often need to purchase coverage as a group to allow for leveraged insurance solutions.

Additionally, franchisors and franchisees face challenges securing cover for machinery breakdowns, particularly for ovens and refrigerators.

The Marsh solution for the franchisor centred on several key initiatives:

Custom insurance program design: Marsh worked closely with the franchisor to develop a suite of insurance offerings for the franchisees that catered to their specific needs (for example, machinery breakdown, safeguarding assets, and general liability risks).
Dedicated account management: To streamline communications and improve service quality, Marsh allocated account executives who were responsible for managing interactions with the franchisees, ensuring queries and issues were handled efficiently and effectively.
Centralised claims management: Recognising the need for a more efficient claims process, Marsh implemented a centralised platform for managing claims. This platform enabled easy tracking, monitoring, and management of all claims in one place, significantly improving the resolution process for franchisees and the franchisor.
Enhanced communication channels: To support the high volume of interactions, Marsh introduced a dedicated free phone line, ensuring that calls from the franchisor and franchisees were directed swiftly to the appropriate departments or individuals.

The results

The tailored insurance program from Marsh delivered significant benefits to the franchisor.

Helped drive revenue growth: The franchisor achieved an average revenue growth of 14% over four years following the implementation of the program. In general, custom, well-managed insurance programs that are effectively presented to the market reduce costs and enhance efficiencies, facilitating growth. Moreover, they provide robust risk management, preventing losses and enabling businesses to operate with minimal interruptions or downtime.
Impacted franchisee participation: Approximately 200 franchisees signed up to the insurance program, reflecting the appeal and effectiveness of the improved coverage.
Strengthened franchisee loyalty and satisfaction: The high level of account servicing and streamlined procedures led to increased satisfaction of franchisees and loyalty to the franchisor.
Enhanced claims operations: The introduction of quick response times for managing claims and proficient work processes in the claims journey improved operational efficiencies.

Key products and services

Marsh provided the franchisor with a range of insurance products to offer its franchisees and to cover its own stores, including:

Public and products liability coverage: Protects a franchisee against injury or damage claims caused by its products or services.
Workers’ compensation: Ensures that franchisee employees are covered in case of work-related injuries. Medical expenses and lost wages as a result of injury can be covered, for example.
Motor vehicle insurance: Covers the franchisees’ vehicle fleets.
Discretionary trust: Provides flexibility and protection for franchisee assets, with alternatives available in regions where this option is not viable.

Conclusion

Following the introduction of the new insurance program in partnership with Marsh, the fast-food franchisor experienced an average revenue growth of 14% over four years. The solution improved the franchisees’ operational efficiency and overall satisfaction. It also increased stability for the franchisees through actionable analytics and risk management insights that led to loss prevention. Marsh’s tailored approach and dedicated support were pivotal in the success of the solution.

Read our latest insight: Unleashing the potential of franchise operations through innovative franchisee insurance programs.