Wednesday, April 21, 2010

Franchise Marketing Concepts

Franchise systems are typically a spread out network of consistent marketing offices of a company. A good franchise system will need solid representation in the field and support staff there to visit the franchisees. The field representative should ensure franchisees understand the value of network advertising strategies. Franchisees should feel confident that the advertising dollars they contribute regularly will be used to accomplish the following:

• Reach new customers
• Meet the competition head on
• Meet sales goals faster
• Promote a positive image in the community
• Promote employee enthusiasm

The advertising program developed by the franchisor is designed to achieve the maximum name recognition and consumer acceptance for the entire franchise system. The Advertising and Development Fund will pool the contributions of all franchisees for the development of both advertising strategies and professionally produced advertising materials for print or broadcast media. These materials will include those to be used by the franchisor on behalf of the franchisees or those that will be appropriate for use by the franchisees in their local markets.

In addition, requirements for minimum levels of local advertising effort by each franchisee will ensure that each member of the network promotes the concept in his/her own area and conducts the kind of advertising that will contribute to his/her individual success.

Field representatives should have a clear understanding of the network advertising program and be able go over the components of the program with the franchisees:

The Advertising and Development Fund

On a regular basis (for example, weekly or monthly), each franchisee is required to submit a contribution to the Advertising and Development Fund. Field representatives should explain that individual contributions will be combined with those of all other franchisees, as well as like amounts submitted by the franchisor on behalf of all company-owned units. The funds will be administered through a separate account for the sole purpose of systemwide advertising programs intended to benefit the franchise system. Field representatives should inform franchisees that an annual statement of the activities conducted through the Fund will be made available to the franchisees.

Local Advertising Requirements

As a member of the franchise network, each franchisee is required to spend a specified percentage of gross sales on advertising in his/her local market. Field representatives should take the time to go over why this is important to the success of the franchise unit and explain that the percentage is dictated by the terms of the franchise agreement. Field representatives should also cover the Advertising Activity Report franchisees should prepare as evidence of the franchisee’s meeting this requirement.

Regional Promotions

Under certain circumstances it may be recommended that franchise systems develop special regional promotions will be developed to feature a sales opportunity for a limited time or to increase name recognition in a particular area. Franchisee participation in these events will be voluntary, as permitted by the franchise agreement. However, participation will entitle franchisees to a credit against requirements to spend money on local advertising. Your field representatives will need to inform franchisees well in advance of special promotions so they will have time to order additional inventory, put signage in place, and train staff to handle the promotion successfully.

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