July 26, 2012
It is often said that uniformity and consistency are the defining features of franchising. Under a successful franchise model, I should be able to walk into any franchised location across Canada and know exactly what types of products and services are available to me. Part of that expectation is fostered by experience, as I participate in the actual consumption of these retail products and service offerings.
But where I cannot visit a store myself to gain that experience, my expectations are formed by the franchise system’s advertising. As a result, it is critically important to franchisors that they impose as much control as possible in advertising and marketing activities to prevent franchisees from going off-message and deviating from that uniformity.
Franchisors generally accomplish this in 2 ways: (1) by requiring franchisees to contribute a percentage of their sales to an advertising fund, and (2) by requiring franchisees to spend a separate percentage of their sales on local advertising. Under the former, the franchisor will administer the collective contributions of the franchisees to produce advertising campaigns that are intended to promote the brand as a whole. Under the latter, the franchisee will be required to conduct its own advertising initiatives (typically in the form of flyers and brochures) which must be approved in advance by the franchisor.
New franchisors have likely not quite established the brand yet by the time they start franchising, and that lack of identity may present opportunities for franchisees to have more of a say in their own advertising activities. Certainly in the case of a new franchisor who has never done much advertising at all, but rather relied on word-of-mouth marketing, an opportunity to negotiate on advertising fees presents itself to the franchisee.
But franchisees should also try to get the franchisor’s permission to operate their own Facebook pages and Twitter accounts. Once taboo in the franchise industry just a year or two ago, preferences have changed course, and franchisors are now not only amenable to this suggestion in many cases, but they even encourage it. Social media advertising is a great way for a franchisee to engage its local customer base and, importantly, it’s free for the franchisee!