Franchising Organizations Seek Balance in National and Local Marketing

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.