Special Report | April 2015 | By Bryan Reesman

The Benefits of Giving

How to measure the return on your philanthropic investment.
Quick service brands earn customer loyalty through charity campaigns.
Christine Specht-Palmert, president and chief executive officer at Cousins Subs, attends the Archdiocese of Milwaukee’s 2nd Annual “Soles for Catholic Education” walk. image used with permission.

The quick-serve business is known for its philanthropy; operators are frequently assisting one charitable organization or another. Doing charity work helps a business connect with its community, give back to those in need, and foster personal relationships with customers.

But there is another reason for quick serves to be philanthropic other than it being the “right thing to do”: Operators also find that investing in charitable giving has a tangible return.

Rachel Turney, director of marketing for California-based concept Juice It Up!, says that by partnering with like-minded organizations—for example, the Muscular Dystrophy Association—the juice brand is able to communicate its core values, which results in a positive relationship with both its customer and its franchisee.

“We target causes that our customers care about, then we gain our customers’ attention, trust, and ultimately their loyalty to our brand, which is the most valuable,” Turney says. “When we get involved with causes, it creates a sense of teamwork with our franchise system, so that’s a great return on our investment, having our franchisees get excited about it at the store level.”

It’s the same at Georgia-based Global Franchise Group, whose U.S. brands include Marble Slab Creamery, Great American Cookies, Hot Dog on a Stick, and Pretzelmaker. Jenn Johnston, Global Franchise Group’s COO and CMO, says programs like Great American Cookies’ partnership with Leukemia & Lymphoma Society—in which the brand’s Maryland stores featured Valentine’s Day cards designed by childhood cancer survivors—are “mission-oriented” for both sides of the partnership.

“The reason we have been so successful with Leukemia & Lymphoma Society is that they’re a charity partner that understands that we are not only doing this to give back, but also to drive our business,” Johnston says.

“When we get involved with causes, it creates a sense of teamwork with our franchise system, so that’s a great return on our investment, having our franchisees get excited about it at the store level.”

Cousins Subs founders Bill Specht and Jim Sheppard have been giving back to their community since the company was founded in 1972, says Justin McCoy, Cousins’ vice president of marketing. The brand founded the Make It Better Foundation in 2013, through which they drive their charitable giving, which is focused on the causes of health and wellness, hunger, and education. It also launched the Wisconsin Sports Awards Scholarship Competition that gives away $14,000 in scholarships annually, and they engage corporate staff in donating time to volunteer with different causes in the areas they are focused on.

McCoy says Cousins looks to make its donations go as far as possible; based on grant applications, brand executives compare what they have for funding with requests they are receiving, looking to see how much of an impact they can have. Cousins often seeks out underfunded organizations that need help more than some larger, well-funded organizations.

“We [analyze] the media impression value for the charitable works that we did in the year,” McCoy adds. “That’s not the No. 1 goal, but we do look at the ROI that we have in the PR that we garner from the grants that we issue. When we do [something] system-wide across all of our stores, at that point I’ll be measuring if that also boosted traffic.”

Operators can often use their charity partners to help measure the return on their investment. Share Our Strength, for example, runs the national “No Kid Hungry” campaign, a program that provides “a lot of invaluable tools and resources that really make it plug-and-play [and] very easy for our restaurants to support our organization,” says Sheila Bennett Perea, director of restaurant partnerships for Share Our Strength. “We have various fund-raising models that work extremely well, and we even have some that help engineer with the brand to help meet some of their business objectives.”

On top of sharing metrics and personal stories related to their work battling childhood hunger, Share Our Strength will ask companies if they have other activities in a given month that they can plug into, such as any limited-time offers, product launches, or other events. Perea says Share Our Strength then works its resources into those platforms to help drive repeat business and continuous sales. “What we’re finding on the [quick-service] side and also fast casual is a giving-gift scenario where guests will give some kind of donation and get something in return,” she says. “We find that the consumer generosity really increases when that type of fundraising element is put into play, and that’s where we see our greatest success.”

Global Franchise Group’s Johnston says music to a CMO’s ears is “This won’t cost any of your marketing support fund or your national advertising fund.” That’s why the Leukemia & Lymphoma Society, which provides all the materials to fundraise and has 52 chapters in the U.S. and Canada that franchisees can plug into, was such a great charitable partner, she says.

“I think finding a partnership that sees it as a partnership and isn’t just asking you straight out for an investment really helps,” Johnston says. “Each side brings something to the table from an investment standpoint. It does come down to resources and hours, and at this point we’re three years into our charitable platform. It’s become a year-round part of our culture. It’s part of who we are.”

To help franchise businesses better scale their charitable programs and increase the return on their philanthropic investment, the International Franchise Association (IFA) Educational Foundation recently launched its “Franchising Gives Back” initiative. As part of the initiative, the IFA Educational Foundation is developing a national registry of the franchising industry's charitable work, through which members can submit details about their charitable activities and any news about upcoming events.

John Reynolds, president of the IFA Educational Foundation, says the “Franchising Gives Back” initiative is designed to bring attention to the work that operators across the country are doing for their communities.

“What I see among franchise business owners is how a charitable idea or project quickly gets organized and scaled,” Reynolds says. “After all, that’s what franchisors and franchisees do in their businesses every day—they look for scaling solutions to market opportunities. Except in this case, they bring the power of franchising to scale for community support or a particular charity.”

But experts say operators must be careful to make their promotional efforts around charitable giving authentic. Philanthropic campaigns that don’t seem authentic won’t prove successful for the brand or its partner.

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Comments

Restaurants need to be careful about promoting charitable causes. Asking customers for money, such as at the point of sale, can make customers feel angry and alienate their customer base. People going to QSRs are looking for a quick and relatively cheap bite to eat, not looking to be harassed for donations. Despite the headlines about how wonderful the economy is, most people are just treading water, particularly in the QSR customer segment.

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Social Responsibility is becoming increasingly important in the mind of today's consumers, and can play a significant role in shaping perceptions of just how values-driven a company is or is not. Charitable engagement and giving is one of the most visible ways for a brand to show it is a good community steward, and in turn, build invaluable good will and advocacy -- important intangible qualities in outmaneuvering the competition. In our work with brand leaders across North America, consistent, intentional and authentic consumers experiences are often the differentiator between sustainable success and simply being an also-ran. Jeff Hall, President, Second To None. www.second-to-none.com

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