July 31, 2017
In case you haven’t noticed, we’re in the midst of a marketing revolution. With the rise of social media, video, and whatever the next new platform brewing below the surface is, businesses can easily get overwhelmed when putting together a marketing plan. Yet, effective marketing becomes increasingly important in the face of stiff competition and crowded marketplaces.
Which leads us to the question: What type of marketing systems should a franchisor establish for a franchisee? In an environment where an ill–thought-out tweet can lead to a major nationwide backlash, we also have to evaluate what type of insight a franchisor needs into the inner workings of a specific franchise’s marketing plan.
You’ve curated well-thought-out branding for your franchise. It’s one of the assets a franchisee is acquiring by joining the team. Additionally, it’s a brand reputation you need to protect. If you have a high-end consulting franchise, chintzy brochures with a second-hand car dealership feel won’t cut it. A rouge marketing franchisee can bring down your name with one poorly-designed radio ad or a few scandalous billboards in the community.
That’s where the ability to control the messaging comes in. This system is designed for the best interest of the franchisor and the franchisee. You’ve developed a structure and messaging with proven success, which benefits a young franchisee in getting the business going.
To accomplish this, you have a one-two punch in the marketing realm. One, you provide standard marketing resources. Depending on the business industry, this could range from brochure designs to standardized ads to corporate-led marketing campaigns. Second this direction with reviewing and approving deviations from the main campaign or local initiatives.
When it comes to real estate, there are only three considerations that matter: location, location, and location. The more and more we transition to the web, the more your “location” matters. This, many times, means showing up in search results (known as ranking) and social media presence.
Almost universally, franchisors will control a single website, eliminating the potential of a few dozen local websites popping up. The main website typically hosts a locations tab, listing all the franchisees. Depending on the size of the franchise, this might be broken up by country, state, or region.
The new gray area comes in around social media. Most local franchisees manage a local page, but it depends on the guidance set out by the franchisor. For instance, you could establish that individual franchisees are allowed to have their own Facebook page, but the franchisor manages the official Instagram account. It’s also not out of line to have the franchisee send in their marketing calendar for approval and guidance.
In January a well-meaning franchisee partnered with a nonprofit to host a “Give Back Event.” These types of events are commonplace for restaurants, where they donate a portion of proceeds to a local cause and in turn the nonprofit spearheads marketing to bring groups to the restaurant. It’s likely you’ve gone to a restaurant solely to support your favorite cause.
Unfortunately, this particular event found itself the center of national attention in an overly politicized climate, sparking potential boycotts and serious PR issues for a major franchise chain. The corporate office’s publicity team had to intervene to do damage control.
In today’s world, where a poorly timed tweet or insensitive Facebook post can spark national outrage, it’s increasingly important for the franchisor to establish marketing guidelines, and where it makes sense, to even approve online marketing materials and promotion.
The last thing to address revolves around pricing. Each franchisor creates a marketing structure for franchisees, varying between local and national efforts. In short, franchisees are required to advertise. You can’t have a successful business with zero marketing efforts. The trick is to establish requirements and a payment structure that fits the best interests for the overall brand and contributes to the success of the individual operator.
These vary across local campaign spends, contributing to national efforts, and exploring co-op structures. I go in depth on the types of considerations you need when creating cost structures, as well as the options, in this post.
Establishing marketing systems and payment structures is only one of the countless measures you need to address in creating your Franchise Disclosure Document (FDD). As both an experienced franchise lawyer and a co-owner of a thriving franchise, I can help guide you through the process to ensure you have the best legal footing building your franchise empire.
Because the FDD plays such a pivotal role in the long-term success of your franchise, it needs to be done properly. Contact me today to see where you are in the franchising process and the next steps toward signing your first franchisee onboard.