By Guest Blogger Tammy Cancela, General Manager, Marketing Executive - Franchise Marketing, Marketing to Women, B:B/B:C
This post originally appeared on LinkedIn.
For nearly a decade, we've helped businesses expand by preparing them to sell franchises as well as providing marketing services to franchisors and franchisee cooperatives (coops). In one case, we played a pivotal role in doubling the size of a leading franchise in a major market and in others, we helped to establish complete franchisee marketing systems.
Spending all this time working closely with dozens of franchisors and franchisees has taught us a few things about franchise marketing:
- Franchises that invest in the future while keeping investors happy in the present are the most successful. Franchisors and their investors generate profit by selling units and nurturing franchisees, and by selling their stake in the business. As long as the number of units keep growing and the individual franchises do well, they don’t really have to invest a great deal in things like developing new products or services or marketing the brand itself. Franchisors who develop new offerings in anticipation of slowing franchise unit sales, maturing business models or competitive threats are the ones that can sustain the system’s business growth and protect their franchisee’s investments. Potential franchisees should look for models and franchisors who show a commitment to the future of the business to mitigate risk in their own businesses.
- Prospective franchisees should get to know the other owners in their market, as they will all succeed – or fail – together. Franchisees in a given market are interdependent on all the other owners to make their marketing work whether they like it or not. Everything a franchisee does is amplified by being part of a system and is a reflection not only on the brand but also on all the other units in the market. If one owner decides that it’s OK to print his own signage on pink paper rather than using approved signage that is professionally printed and displayed, all of the locations suffer. But by the same token, if all the local franchisees decide to, say, support a single charity, that action is amplified, too. It definitely pays for franchisees to know one another and band together for marketing and operational support if they can.
- Franchisees know their own markets and can funnel critical information to the franchisor…if there are formal and informal pathways to receive it. Franchisors must walk a fine line between keeping a strong grip on the processes, products/services and brand they know will make the franchisee’s businesses successful and limiting the franchisee’s free operation of their business. The truth is that franchisees operate day in and day out on the front lines of the business and generally have a superior understanding of the market, competition and customers at the local market level. Franchisors that take franchisee’s feedback through both formal and informal channels and understand the value of that feedback are way ahead of the pack.
- Franchisee success equals system success. Franchisees have often invested their life savings or 401K balance in their franchise. In short, the business must succeed or the franchisee could be ruined personally. This is the enormous responsibility that a franchisor assumes when he sells a unit. Respect for individual unit owners is the mother’s milk that helps them grow strong and tall.
- Other than running their own units, hiring a local market consultant or partner is one of the hardest things franchisees will have to do together. The first time a franchisee coop hires professionals to help them on anything (from marketing to sales training), the decision can be fraught with fear and friction among the members. How much should they pay? Are they getting a good deal? What firms or consultants will be a good fit? How can they get all the owners on the same page? Can they legally contract as a group?
I’ll tackle some of these questions in my next post.