Franchise Advertising Best Practices: How to Reach More Local Customers

Did you know that over 850,000 franchised businesses operate in the U.S? With $893M in earned revenue reported by franchises, they are spending significant ad money in the local market. If you’re selling media space and services to franchised businesses, AudienceSCAN from AdMall, contains the data you need, including in-depth profiles on dozens of franchise customers.

What are the latest trends in the franchise industry?

One of the latest trends in the franchise industry includes the growth of multi-unit ownership. Owners want to achieve economies of scale as they grow revenue. Many times, the franchising organization will allow them to reduce the required percentage of ad spending for the second or third units. For the media seller, scoring a multi-unit ad sale can be lucrative.

A great way to approach your advertisers with this tactic is to utilize AdMall’s Digital Audit, powered by SalesFuel. In the report, you’ll see how the company is reviewed on social media sites. Compile that with AdMall’s AudienceSCAN profiles, which show how a specific audience reacts to a business when they have positive or negative reviews online, and immediately you’re setting yourself up for success with a client.

Who is responsible for franchise advertising?

In the franchise business model, the franchising organization sets the direction for advertising. They also establish brand messaging through national or regional campaigns. Individual franchisees use promotional advertising to increase foot traffic and revenue.

What does the franchisor contribute to advertising?

Franchisors typically require their franchisees to pay a set percentage of revenue, often between 1% and 4%, to an ad fund. The franchisor may also require a separate payment into a branding fund. The franchisor uses this money to develop brand guidelines, images and approved advertising materials. They may also use the money to buy media for national or regional advertising.

Co-op Advertising and Franchises 

A few franchises have a true co-op advertising plan. In these cases, the franchisor will reimburse franchisees from its own funds for some approved advertising costs. While participation in traditional co-op advertising by independent dealers is not required, franchised system operators often require participation

What frustrates the franchisor about advertising?

There’s tension between local owners and the parent corporation, reports the Marvia in its Franchise Marketing Insights report. Local owners want advertising done that’s customized to their market. But the parent organization wants to maintain brand consistency.

Franchisors are frustrated because at least 42% have encountered off-brand or unapproved ad content produced by their franchisees.

What does the franchisee contribute to advertising?

Franchisees are usually required to spend a fixed dollar amount or percentage of revenue on local ad campaigns. Depending on the franchise system, they may either buy their own media or work with a partner designated by the franchisor.

What frustrates franchisees about advertising?

They are required to use national marketing assets. To customize them to the local market, over half of franchisees need 6+ hours a week.They also need approval before they use the customized pieces. 23% complain that getting approval is a time-consuming process.

Over time, long-term franchisee owners know what works. They claim to understand how to market at the local level. But they believe the parent organization does not hear their concerns.

What types of franchise advertising is most common?

Paid leading ad formats are Facebook/Instagram. Franchisees use them more than Google ads. But there are variations by industry vertical.

Some franchisees develop short videos and if it attracts attention, they will support it with advertising funds.

Google LSA (local service ads) are also popular. Franchises in the service categories use this format more than search keywords. And due to changes in Google's system, these businesses are transitioning into Performance Max campaigns with pay-per-lead goals.

Industry experts recommend trying CTV advertising to meet the needs of the two-layer franchise system: national or regional branding campaigns and local promotional campaigns. The media format allows franchisees to target consumers in specific zip codes. With a tool like AdMall, franchisees can learn where target customers live by zip code. They also learn how much consumers are spending on specific goods and services. Once the campaign is set, local franchisees can measure results of spending like sales lift or additional foot traffic in the store or restaurant.

Closing thoughts

Media sellers can enrich their accounts' franchise advertising strategy by checking out AudienceSCAN profiles in AdMall. With information like media use and preferences, purchase intent and lifestyle profiles, they can help local franchisees improve targeting and increase revenue.