Franchising is a business model with many benefits. So it’s not surprising that we’ve seen a recent flurry of recognizable brands launch a franchise model for the first time in their history. Noodles & Company is investing in its franchising growth strategy for the first time in more than a decade, to focus on expanding beyond 77 franchises out of 500 locations. In an effort to expand beyond 30 units, Modern Market Eatery is developing a franchise program. For the first time in 44 years, even The Vitamin Shoppe is going to partner with business owners to operate franchise stores.
Franchising can help accelerate brand expansion, minimize growth risk, and provide a good way to obtain expansion capital.
From a marketing perspective, the biggest advantages come in the form of:
- Increased brand awareness most often paid through the ad fund.
- Franchisee’s drive to succeed and the local knowledge they bring to the brand.
However, with a bit of irony, these two powerful marketing advantages are at the same time a potential recipe for disaster if not harnessed effectively and leveraged to a brand marketer’s advantage.
Here are the challenges cited most often by marketing leaders at top franchise brands:
1. Our franchisees don't trust us to deliver brand ads in their community.
Nothing will slow down a brand’s growth faster than franchisees who lose trust in their brand team. Some franchisees believe they are marketing experts, but in reality ... they’re not. When it comes to today’s sophisticated digital advertising landscape, they should rely on the brand team.
As a brand team, look to deliver advertising results PER location. Franchisees who contribute to the ad fund rightfully expect measurable results in return.
2. Franchisees are supposed to spend on local advertising, but we can’t monitor it.
Soon, franchise brands will rely less (or not at all) on local advertising budgets. Brands can manage it all from a centralized platform. Technology has come a long way. It’s now possible to centrally execute all local advertising on behalf of franchisees, while continuing to provide the right amount of local autonomy.
For brands still reliant on local marketing budgets to be spent effectively, look to use a technology partner that provides access to all the most powerful channels in one place. If you cannot see all local ad results in one place, regardless of the channel, you’ll waste valuable days or weeks trying to aggregate local data to make informed marketing decisions. Even more time will be spent tracking down which franchisees are investing and which are not.
3. Franchisees are not adopting local advertising like we need them to
Similar to the point above, if your brand counts on local owners spending a certain amount per month on local advertising—you’ve got to make it easier for them. Your brand suffers when there are gaps in local advertising coverage across the country—giving the advantage to your local competition.
Taking care of advertising, and being up-to-date on the latest digital platforms to help, is something every brand team should strive for. After all, franchisees join your brand for your expertise in areas like marketing. Find a solution that allows your brand to create campaigns across the most powerful ad platforms, leveraging first party data per location. Then turn over execution decisions to your local owners, like how much to spend, what creative or message to run in their market, and even when to launch the campaign. Collaborating allows you to maintain control, and makes your local owners feel invested in brand advertising.
4. I want to safely start an ad fund, but need a way to show ROI to my franchisees.
Starting an ad fund today will open up your brand to new liabilities. Regardless of the channel, or where the advertising budget is coming from—ad funds or local funds—leverage a solution that gives you all advertising data in a single dashboard with the ability to drill down to results per location. When your franchises call asking “how is the ad fund helping my location,” you will already have the answer.
Whether your brand has been franchising for decades or is newly embarking on a franchising strategy, it’s essential to have a solid martech stack in place to make digital initiatives a seamless part of your franchising plan.
Michael Morris is the Co-founder and Head of Growth at Hyperlocology, a multi-location marketing platform that solves the pain of managing digital advertising for hundreds or thousands of brand locations. Hyperlocology empowers brands to centrally manage digital advertising, tailored for each location, with transparency and collaboration required to drive results in every market.