Franchising Organizations Seek Balance in National and Local Marketing

by | 2 minute read

Fran­chisors have a vest­ed inter­est in mak­ing sure their fran­chisees pro­tect the val­ue of the brand they have devel­oped. The par­ent orga­ni­za­tion often dic­tates how fran­chis­es go about mar­ket­ing, pric­ing their pizzashopprod­ucts and ser­vices, and buy­ing sup­plies at the local lev­el. While most par­ent orga­ni­za­tions col­lect fees for region­al or nation­al brand­ing cam­paigns, research shows that fran­chisees would like more inde­pen­dence to man­age their local social media pres­ence.

The BIA/Kelsey Local Com­merce Mon­i­tor reports that the typ­i­cal fran­chis­ing orga­ni­za­tion pays about 43% of the cost of online mar­ket­ing for fran­chisees. This may often be fund­ed by the adver­tis­ing con­tri­bu­tion the local busi­ness is required to make. In addi­tion, about 51% of fran­chis­ing orga­ni­za­tions are also “high­ly involved” in the social media pres­ence put forth by local busi­ness­es. The small busi­ness own­ers may be con­cerned about the authen­tic­i­ty of the con­ver­sa­tions they are hav­ing with their cus­tomers when the cor­po­rate office is look­ing over their shoul­der.

This study comes at a time when more fran­chisees are pub­licly dis­put­ing their rights with their par­ent com­pa­ny. For exam­ple, sev­er­al Steak ‘n Shake oper­a­tors are suing for the right to con­trol prices and cer­tain pro­mo­tions in order to pro­tect their prof­its dur­ing these dif­fi­cult times for fast casu­al and quick-serve restau­rants.

Michael Boland, VP of con­tent at BIA/Kelsey, notes that fran­chisees aren’t just like many oth­er small busi­ness­es. In some cas­es, they may have access to a larg­er pool of mar­ket­ing funds. In oth­er cas­es, their flex­i­bil­i­ty regard­ing what they do with their ad mon­ey may be lim­it­ed by their fran­chise agree­ment.

Have you encoun­tered some of these issues as you work with fran­chisees in the local mar­ket?

[Sources: Jar­gon, Julie. Bat­tle over Menu Prices Heats up. Onlinewsj​.com. 22 Aug. 2013. Web. 27 Aug. 2013; Local Com­merce Mon­i­tor. Biakelsey​.com. 201 Web. 27 Aug. 2013]
Kathy Crosett
Kathy is the Vice Pres­i­dent of Research for Sales­Fu­el. She holds a Mas­ters in Busi­ness Admin­is­tra­tion from the Uni­ver­si­ty of Ver­mont and over­sees a staff of researchers, writ­ers and con­tent providers for Sales­Fu­el. Pre­vi­ous­ly, she was co-own­er of sev­er­al small busi­ness­es in the health care ser­vices sec­tor.