What Marketing Support you should expect when investing in a franchise
When looking at investing in a franchise and seeing the different types of support, which are included in the package being offered, you may wonder what exactly you will get. Tom Endean, of the British Franchise Association, provides some advice about what marketing support a potential franchise owner should expect to receive.
There are many advantages to franchising, trading under an established brand name being one of the more visible. However, marketing support in franchising runs deeper than the sign above the door.
Even new franchise systems will have proven that their business model works. This means that the business has already established itself as a brand that can deliver and one that you will not have to go through the painstaking process of creating yourself. This is a huge advantage, but still just the icing on the cake. The question you want to ask is: What happens on an ongoing basis in franchising that is going to give you a better chance of succeeding than other businesses?
Unless you are buying a resale (an existing franchise with an established customer base) you will need to get the business up and running, which means getting the name known and attracting your first customers. This may be significantly easier in a franchise business with a worldwide brand gaining instant recognition, but even then you want to let customers know you’re there. If the brand has yet to be established in the area this is obviously tougher.
This is where the franchisor should be helping with a marketing launch package. At this stage, you need to remember that all networks are different, so what may happen in one brand, may be very different to another. The important factor though is to know what to expect and be comfortable that this will give you the positive start that you need.
A number of marketing methods to help get you up and running may include direct marketing through mailing; local adverts in the newspaper, directories and radio; or possibly a data list as a starting point for potential client calls. You may find that some networks will have long established systems at their central office, which will start this as a matter of course without you being involved. Others may provide the tools, but it will be your responsibility to make it happen. There are many combinations that can work for the various different business types, but make sure you know what to expect so that you can plan accordingly.
It is likely that this launch marketing phase is more intensive than ongoing marketing, or at least it is likely to involve more support from the franchisor. Be sure to recognise this and know what will be reduced and when.
Franchising’s formula of a locally owned and run enterprise, driven by a small business owner, with branding, economies of scale and support from the wider network, gives the consumer the best of both worlds and the business a far better chance of success.
Don’t forget, however, that this is a not an easy solution, it is not an instant pill for success and it is not without hard work and dedication. This includes marketing. Yes you will receive ongoing marketing support, but don’t think that this will mean you don’t have to do anything – even in the systems where there are extensive and highly evolved central marketing operations. You will still need to use your enterprising nature to maximise the relationship with existing customers and attract new customers from within your territory.
From the franchisor’s side, the ongoing marketing support is quite likely to cover several aspects:
- Ongoing brand protection.
- Development of the brand image.
- Investment into new marketing platforms.
- Centrally run promotions, advertising and PR.
All of this ongoing work comes at a cost to the franchisor. It may be that all of this is covered as part of the ongoing Management Service Fee, but many franchisors also operate an additional fee know as a Marketing Levy. Although different between networks, this is usually one or two per cent of turnover paid into a central pot purely for the use of consumer marketing. Ideally it will be transparent as to what the money is being spent on, but in a number of cases this goes a step further and a committee containing franchise owners is set up to help decide on its use.
Time and again, franchising has greatly out-performed other start-up businesses and the marketing support that is part of its make-up is one of the important factors in that success. However, make sure you know what you are getting and take advantage of the specialist franchise solicitors in the industry to help you fully understand what is committed to in the Franchise Agreement.