Continue to Site

    One Huge Marketing Problem Every Franchise Faces

  • A look at the hyperlocal marketing problem, and how to solve it.

    Unsplash/Andras Malmos
    In addition to national or regional fund contributions, franchisees are required to spend on their own local marketing.

    Across the franchise brands I’ve worked at in the retail, quick-service restaurant, fintech, and automotive industries throughout my nearly 20-year marketing career, one hot button issue rises above the rest. Equal opportunity marketing—or better expressed by franchisees; “How are my marketing dollars specifically helping my stores?”

    Inevitably, when individual marketing contributions are being aggregated to fund national or regional marketing programs in an attempt to benefit the many or all, some restaurants get left behind. A rising tide lifts all boats, but not equally in the eyes of franchisees. There’s the rub.

    As franchisors, we need to do better by those entrepreneurs who have chosen to invest their money and trust in our brands. In this article, I’ll dissect the hyperlocal marketing problem and how to solve it.

    The Problem: Ad Funds Do Not Benefit All Franchisees and Quick-Service Restaurant Locations Equally

    Franchisees typically contribute 2–7 percent of their gross sales each month to one or more advertising funds: national marketing or brand, regional co-ops, and a required local store marketing spend.

    The marketing equality problem typically surfaces when national or regional co-op advertising dollars are being used to fund geo-targeted digital marketing campaigns around all quick-serve locations in a franchise system or specific DMA. It’s not a question of whether each restaurant receives brand awareness, sales and an ROI commensurate to their contribution. It’s a fact—they don’t. Broad programmatic optimizations guide the national budget, eventually steering most, if not all, marketing dollars toward DMA’s with the largest population or areas that generate the most clicks, conversions, or other KPIs.

    In addition to national or regional fund contributions, franchisees are required to spend on their own local marketing. This is fraught with brand compliance, cost-efficiency, data, and optimization issues. Plus, without the national buying power of the brand or corporate guidance, individual franchisee campaigns suffer and, more often than not, don’t break even on ROI.

    When these scenarios unfold, resentment occurs. Trust between franchisees and franchisors begins to erode. Some franchisees go rogue. Others rightfully remain frustrated that their ad dollars are not working for their store with the same sophistication as national advertising, while also not allowing them to locally customize their campaigns. Franchisees with higher gross sales want to measurably know their larger marketing fund contributions are benefitting their locations, not unfairly helping others. The good news? This doesn’t have to be the case.

    Creating an Ideal Experience for Franchisees and Customers Alike 

    National or regional digital advertising campaigns can, and should, be executed with isolated budgets equal to individual location contributions. Franchisees want the ability to locally optimize their ads to create a relevant, compelling message for their custom local audiences. Multi-channel execution is a must. Facebook, Instagram, Google, Amazon, YouTube and other platforms should be leveraged by every location without concern for minimum budget thresholds. Individual quick-service locations deserve access to location-specific reports, giving them a peek behind the curtain into marketing results for their business. 

    From a consumer perspective, this parent-child marketing setup enables the most locally relevant and targeted message to be sent at the right time, on the right channel, with the right offering. This powerful combination is what builds brand equity and turns local customers into lifelong brand advocates.

    The Solution: A New Breed of Multi-Location Marketing SaaS Platforms

    For a hyperlocal digital marketing program to be feasible cost-wise and operationally, by an in-house team or outside agency, it needs to be powered by technology. Successful quick-service restaurant brands are now utilizing enterprise multi-location SaaS (Software as a Service) marketing automation platforms provided by companies like Hyperlocology, and others, to win back the trust of their franchisees by bringing big-brand digital marketing capabilities to their smaller-budget locations in a unified way. To be able to execute this while allowing franchisees to maintain their marketing freedom and contribute expertise in their community creates a whole new reality for restaurant franchises.

    Build Trust While Also Building the Brand

    As a franchisor or marketing team, we can now empower local owners or franchisees to be fully invested in their local marketing campaigns by giving them access to individual budgets, reporting, locally relevant creative and content customization options, and the ability to drive ROI to their locations commensurate to their individual marketing fund contributions. Individuals can leverage the spending power of the national brand and benefit from cutting edge marketing technology, simply and cost-effectively. The curtain can be lifted and transparency restored. Results can be improved. Every quick-service restaurant can be more successful and help build the brand from the community up. Trust can be rebuilt amongst franchisors and franchisees.  What was once a distant dream for many brands and franchise marketers has now become a reality.

    Jeffrey Lentz is president & CEO of Elevated Franchise Marketing, which provides consulting and marketing services to franchisees, franchisors, and franchise suppliers.  A franchise marketing executive, consultant, and business owner with 20 years of experience across quick-service restaurant, retail, fintech and automotive industries, he has held marketing leadership roles across five franchise organizations with a focus on franchise development, consumer, b2b, product, field, and local store marketing. During his time at Batteries Plus Bulbs he led franchise development marketing efforts over a period of rapid growth that saw the company open 250 stores in 5 years. He has made multiple appearances on national TV show Fox & Friends and is a contributor to industry trade publications and media outlets. He holds a B.A. Degree in Communications and Marketing from Marquette University. Connect with him on LinkedIn.