Marketing for Franchised Brands

Franchisors are often at odds with franchisees about how to market their units. Franchisees, very often, want TV or radio spots, customizable for their area, whereas Franchisors know that those media aren't as effective as others - especially in an area where the brand has little or no awareness (an 'outlying' store).

Say you're a potential Franchisee in Columbus, OH, and you buy into a pizza concept with good store density in the southeast. Your marketing expenses will be higher because of lack of awareness and no economies of scale.

Most of us know this intuitively, but you'd be surprised at how far apart Franchisors are from Franchisees on this issue. Here, we look at why it happens.

From the time a prospect contacts a brand, the sales process begins. During the process the sales team trots out in-store POP, marketing manuals, and print collateral, all showcasing the beauty of the brand and the creativity of the team. It's their jobs. It's what they do.

Prospects see the objects of their desire - slick marketing material. They hear how the franchise consultants will help them market their units, how other Franchisees are a knowledge base to tap, and how they'll get their own 90-day marketing plan to hit the ground running.

So far, so good. The problems come in 12 months down the road, when reality sets in. The reality is that, while the materials look great, the store owner has to purchase the media to put them into the community. This isn't a perceived problem prior to opening - we'll buy a couple of radio spots, tell 100,000 people we're here, and then by more spots with our profits.

Chick-fil-A had nearly $800 million in sales before they ever ran their first TV ad. Have you ever seen a TV ad for Starbucks, one that wasn't for a packaged product that also sold in grocery stores? Not likely. Until recently Starbucks was all about billboards and store signage.

The result is a chasm: Franchisors know that local store marketing, getting Franchisees into the community shaking hands and kissing babies, is the best for all stores (that's how they built their first one, in most cases). Franchisees have been led to believe that corporate would be more involved, that materials and tools would do the work for them. Corporate's view is that they'll provide the hammer, but it's up to you to swing it.

Who's right? Usually, the Franchisor. It's their responsibility to provide tools, resources, and guidance. They've seen marketing done both ways - media vs. LSM - and they know when to apply each. Corporate's largest complaint is that owners sit behind the counter, waiting for sales instead of going after them. They bought themselves a $6 an hour job.

The problem is that expectations were not set properly. At the end of the day, success or failure of a location is dependent on the Franchisee. Many lawsuits, however, cite lack of marketing support as the reason for closure.

One solution to this issue is to clearly define expectations and roles at the beginning of the relationship. It would help if Franchise sales teams put more emphasis on the tools instead of looking to impress. It would also help if, during training, franchisees were exposed to the reality - "Here are your tools, and here is how to use them." An entirely new mindset needs to be established, and it can't be done once the store is opened.

Many Franchisees in the restaurant industry come from outside the industry. They come from big companies and only see the collateral, not the sales process. They see Outback and McD's advertising and have an unrealistic perception of its effectiveness. Advertising can be very effective, but it costs a lot of money and can be a treadmill to an under-capitalized unit.

Local store marketing builds customers and relationships and is more effective in both the short and long runs.