Franchise businesses are unique, pairing national-level brands with independent-minded local business owners — and this is an arrangement that brings unique challenges to the table. In this blog, we’ll talk about some of the biggest surprises, and how to tackle them.
No matter what kind of business you have, there will always be marketing challenges unique to you. A big, national chain has 0to worry about a unified message and strategy that works from coast to coast. Small businesses have to worry about balancing revenues against their marketing budgets, serving their local area, and standing out from the pack. But a franchise operation has to worry about both. A franchise operation is a big machine, just like any national chain, but the moving parts that make up that chain are franchisees — semi-independent operators with concerns unique to their location.
Franchise businesses have a lot of the same problems as big chains and small businesses — and a third set of problems unique to them.
In this blog post, we’re covering five of those challenges — and how to solve them.
1) When To Tailor Your Marketing For Local Audiences
One of the major benefits of a franchise brand is consistency — a customer hundreds of miles from home can walk into a franchise location and feel just as comfortable as they do at the location 500 yards from their front door. But maintaining that consistency can sometimes be difficult when you’re dealing with franchisees, who may feel the need to make tweaks to suit the on-the-ground realities of their particular location. Costs of things like rent, supplies, and wages can vary wildly from region to region — something that’s very important to consider when, for example, advertising a special price in a nationwide ad campaign.
When Subway brought back their popular “$5 Footlong” campaign, for example, some franchisees went so far as to file a complaint with the FTC, on the grounds that it was leaving their locations unprofitable. It’s important, then, to run the numbers carefully — a well-executed national campaign can be a huge driver for business, but you need to make allowances for the different conditions facing individual franchisees.
At the same time, allowing franchisees to experiment with unique promotions and items in their area can pay huge dividends for your company down the line: the Egg McMuffin was originally invented by a franchisee with six locations. So while you want to have your franchisees all on the same page as much as possible, you should still leave room for them to surprise you.
2) Mediating Franchisee Disagreements And Sharing Best Practices
Even in the modern digital age, where ads can be targeted with surprising accuracy, there’s no guarantee that one franchise’s ads will only go to that franchise’s target customers. ZIP codes, newspaper coverage areas, city boundaries, and other territory maps may overlap with several different franchisee markets. Corporate may not see this as a major issue: a rising tide lifts all boats, and if one franchise’s ads also improve business in a neighboring territory, so much the better.
But if one franchisee is running a sale or special that others in the region aren’t, or if one franchisee has raised their prices when others haven’t, that can cause confusion and frustration in your customer base. Furthermore, if one franchisee is spending money on campaigns while their neighbors keep their marketing budgets at a bare minimum, the big spender can start to feel like the others are riding their coattails.
Some franchise operations get around these issues by encouraging franchisees to form area marketing co-ops, where all franchisees contribute to a shared pool to be used for print and digital marketing materials, and to work out disagreements before they happen. Building a firm set of guidelines around things like sales and pricing (so that your franchisees are all following the same script and not undercutting each other) is also a good tool to have in your pocket.
3) Mediating Disputes Between Franchisees And Corporate
Sometimes, franchisees get into disagreements with other franchisees — but in other cases, like the $5 Footlong example above, the franchisees get into disputes with corporate HQ itself. If things get to a point where franchisees are filing complaints with the FTC and hiring lawyers, there have been multiple failures along the way that have led to a public spectacle.
The solution is communication. Having a lot of open channels between you and your franchisees is key to making sure they understand the reasons behind marketing decisions — and it also gives them a forum to voice concerns before they get out of control. Including franchisees in a council or governing body so that they’re part of the decision-making process is another good way to make sure your franchisees are feeling heard so that when marketing strategies are ready to be implemented, they’re your biggest evangelists instead of your opponents.
4) Empowering Franchisees To Overcome The “Tech Gap”
Franchisees come to their business from all walks of life, and as such can vary wildly in things like age and education level. One of the places this can have the biggest impact is in digital marketing, where older franchisees may have come up in an era where things like Facebook ads weren’t necessary — and they may find the technical aspects of managing those ads difficult and intimidating.
Making sure that your franchisees can understand the digital aspects of the job — or the tools to learn if they don’t understand yet — can be key to implementing a cohesive strategy across your franchise operations. When choosing the digital tools for your franchise business, ease-of-use should be a chief concern, and providing extensive training on those tools is a must.
When Balihoo designed their platform for hyperlocal marketing, one of their chief focuses was making it as easy and intuitive as possible so that franchisees could manage their campaigns without taking focus away from their core business.
5) Convincing Franchisees That Marketing Is “Worth It”
Some franchises have mandates in the franchisee agreement that dictate what percentage of their budgets get allocated to marketing; some also have a minimum requirement while suggesting a higher percentage. However, it can sometimes be difficult to convince franchisees to go beyond the bare minimum. After all, money not allocated to marketing is money that goes straight into their pockets, while calculating the ROI of a well-executed marketing campaign can feel more abstract and harder to pin down.
It’s well established that marketing your business leads to more business, but drawing that line from point A to point B requires a couple of things. First of all, you need to make sure your franchisees are well-schooled in the sort of metrics used in gauging the success of a marketing campaign. Just like making sure franchisees have the tools to launch their campaigns, they also need to be able to see how those campaigns are yielding results. Having a dashboard that’s easy to read and track makes this a piece of cake.
Additionally, your campaigns need to have numbers transparency. Some marketing partners have been known to hide additional fees inside marketing budgets, taking additional money for themselves that can make it more difficult to see the ROI in digital marketing. Having clear access to the numbers and how every penny is allocated is key to ensuring your franchisees understand the benefits of a well-executed campaign.
Balihoo’s policy of transparency in reporting means that when we see a 9:1 return on ad spend with our clients, we can show them exactly how they got there, demonstrating the importance of a robust marketing budget.
A lot of challenges in franchise marketing boil down to the same thing: the gap between establishing a brand that feels consistent across the board, and figuring out when the circumstances for individual franchisees necessitate an exception to the rule. And a lot of the solutions boil down to the same thing, too: keeping lines of communication open, and ensuring that your franchisees are equipped with the tools they need to succeed and know how to use them.
These are the sorts of issues that Balihoo was built from the ground up to help. With Balihoo’s dashboard, you can turn your brand message into hundreds or even thousands of high-performing, locally-tailored digital ads at the push of a button. Managed centrally through our Balihoo platform, our team of digital media experts provides flexible support for paid search and social campaigns.
Need your digital marketing budget to work harder? Ready to see more customers walking through your franchisee’s doors? We’re ready to help! Reach out today for a free consultation.
Sean Kelly, Senior Content Writer
Sean Kelly is a Senior Content Specialist, St. Louis-based engagement expert with 20 years of experience in content writing, and 8 years in adtech.