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Franchisee Advice

The Basics Of Multi-Location And Franchise Marketing

Owning a business that is part of a franchise or that has multiple locations can be a positive business venture when done correctly. That said, there are a lot of things to consider before purchasing a business that is part of a larger corporation.

Scott Langdon

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The last thing you want to do is invest in a company where the marketing has been handled irresponsibly. If you’re in charge of your own marketing, don’t go in blind not knowing how to advertise. This will cause your investment to tank, and all your hard work and money will go down the drain.

In other words, it’s important to make sure you do your homework and understand all that goes into owning a franchise or a multi-location business before making a purchase. And if you decide to invest, take the time to learn how to market correctly.

This article will explain the basics of what you need to know in order to protect your investment.

The before

A recent study found that franchise marketing can be a tricky venture. Any time a large group of people get together and have to agree on how to handle money, there are risks.

There will be different opinions about how the money should be spent, with each person thinking about the best interests of their own business, and not necessarily the corporation as a whole.

On the flip side, franchise marketing can also be a huge bonus for businesses because it gives access to a large pool of money that can potentially be used to improve marketing for everyone involved. Here are some things to consider before purchasing a franchise.

You need to understand what franchising is

This may sound obvious, but it’s important to understand exactly what franchising is before getting into it. Many people think franchising is its own industry. It’s not. It’s more of a way of doing business. It’s a hybrid business plan that combines working for yourself and working for somebody else.

This is why it’s a good fit for many people, but not for everybody. You won’t have complete autonomy over your business, but there will also not be someone higher up telling you what to do every minute. It’s a team effort.

You must be willing to be part of the team

Franchising means working for yourself, but not by yourself. This means that everyone involved has the responsibility to operate their own successful businesses long term, and that the success of the brand as a whole depends on each team member’s individual successes.

You have to be willing to operate as a whole group with the brand’s needs at the forefront. If everyone is only thinking of their individual businesses, the brand as a whole will suffer, and everyone will lose.

This may mean coming together to create and decide on a shared marketing plan that will positively affect all the businesses involved.

It takes money to make money

This is a concept that is hard for some people to swallow. Franchise fees range from a few thousand rands to tens of thousands. Royalties typically range from 5% to 8%, with the marketing and advertising cost an additional 1% to 3%.

Despite the steep fees, many people still choose to invest because they realise the potential for them to make more money in the long run as part of a franchise than they would just working on their own.

Again, this goes back to being willing to work as part of a team even though you are still responsible for your own business. A company-wide marketing fund means you won’t have complete autonomy over how your business is advertised and what exactly happens to that large fund to which you have to contribute. You will be able to voice your opinion, so it’s important to understand the basics of franchise and multi-location marketing.

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The after

If, after you’ve done all the necessary research, you still want to buy into a franchise or expand your business into multiple locations, your work isn’t done. In fact, it’s just started because now you need to understand the intricacies of marketing for more than one location and how to optimise your results so that your investment continues to be a positive one.

Here are some marketing tips:

Keep customers at the forefront

In the end, customers are what will keep your business thriving, and so it makes sense that they should be considered at the top of your marketing plan. Don’t be afraid to try something new — just make sure to evaluate whether or not your strategy is bringing more customers through the door. If the answer is no, move on and think of something else.

Be prepared to debate strategies with the other members of the team. It’s okay to argue, as long as everyone is keeping the customer’s wants and needs in mind. Ultimately, this is the only thing that’s going to make everyone’s businesses successful.

Consider customer reviews

This is something that is often forgotten at the corporation level — make sure you don’t forget! The unfortunate truth is that most reviews are left by unhappy customers who feel the need to voice their opinions. Happy customers tend to stay quiet. This paints an unfavourable (and often unfair) picture of the business online.

Don’t be afraid to get out there and ask your loyal customers to leave reviews. It’s the only way that your business has a chance to accurately portray its reputation.

In addition, encourage these customers to utilise your Google ‘My Business’ page. And don’t forget about citations that allow reviews. Citations often show up first in search results listings that target your keywords, so it’s important that those reviews are favourable as well.

Create a quality website

Your business website should be at the centre of your marketing campaign. It’s where your customers go to find out information about your product, as well as where, when and how to reach you. It’s ultimately what will bring customers through your front door.

Make sure each store has an individual locations page that is optimised and can be indexed by Google. These locations pages should be up-to-date with accurate information about your business — address, operating hours, contact information, etc.

Finally, make sure the site is well run overall. It should be optimised, run quickly, be clear and uncluttered, have a quality mobile version and provide well-written content that customers are looking for.

Input from franchisees

Although the franchisor ultimately has the last say in how marketing money is spent, you should be part of a corporation that asks for the opinions of the franchisees. Some businesses have an elected board of franchisees that meet with the franchisor regularly to discuss the wants and needs of the whole group.

Regardless of how this is done, the individual franchisees should have the opportunity to contribute their opinions into the overall marketing plan. After all, they’re the ones who deal with the customers directly. A good franchisor will recognise this and seek out opinions from franchisees.

Proper money allocation

Typically, a large company marketing fund gets distributed into three different areas — the costs of administering the marketing effort, the cost of the advertising materials themselves and the media purchases to place the advertisements.

A good multi-location/ franchise marketing plan will dispense funds equally into these three areas. Be wary of any plans that seem to tip the scale in favour of one area over another. All three of these departments directly impact each other, so they should be treated with equal importance.

Two common types of advertisements are brand building versus customer attraction. Both are good for business and should be used when creating a marketing plan. One should not be deemed better than the other.

Don’t forget about SEO, especially local

While local searches tend to benefit local, single location businesses tremendously, they don’t always have the same effect on multi-location or franchise businesses. Because of the nature of local searches, it’s difficult for the latter to rank as well as single location companies, but it’s not impossible as long as you pay attention to the rules of SEO.

Don’t ignore local SEO principles. As I said before, each location should have an individual local landing page. You should also take time to make sure you have clear, positive citations.

Evaluate whether or not the marketing plan is working

Last but not least, remember that any marketing plan can look good on paper. That doesn’t mean it will be successful when put into practice. It’s important to analyse your results and determine if your efforts are, in fact, increasing brand awareness and bringing more customers through your doors. Consult your team for their opinions and to find out how the plan is working for them.

Remember, two heads are better than one, and ultimately it needs to have positive results for everyone, or the brand as a whole will suffer. In the end, it’s your livelihood that will suffer if the marketing plan doesn’t work, so put in the necessary effort and due diligence to evaluate its effectiveness and make changes when necessary.

Scott Langdon is an entrepreneur with over 13 years of internet marketing experience, and currently serves as a managing partner of the nationally-recognized SEO firm HigherVisibility. Langdon and the HigherVisibility team work with clients of all sizes from across the country to offer a full range of interactive marketing services. He resides in Memphis, Tennessee.

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Franchisee Advice

5 S-Words Make Your Store Site Pay For Itself

Richard Mukheibir, CEO of Cash Converters recently addressed delegates at the FASA (Franchise Association of SA) conference on the topic of choosing the best location for their business. He spoke about the 5-S technique to assist business owners with deciding which premises is best suited for their business.

Richard Mukheibir

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The combination of continuing trading uncertainty in South Africa and the new financial year for many businesses can add up to carefully reviewing costs – including leases on premises. Choosing a site to set up or relocate your business can be just as stressful as deciding where to buy a house – and just as fundamental to its health, finances and sustainability, says Richard Mukheibir, CEO of Cash Converters.

This is not the time to snap up the property with the cheapest rental as that might turn out to be something you regret in the long run. Nor is it the time to be dazzled by the swankiest premises you can find. The potential for bragging rights could turn out to be poor value for money.

“This is a time for your head to rule your heart regardless of the industry you trade in.” he says.

The real-estate mantra of “location, location, location” works just as effectively in commercial as it does in private property but you will often be looking for rather different factors. Mukheibir shares his 5-S technique to help you begin narrowing down the areas where you will consider locating your business – first at the macro level, focus in further to the meso level, then look more closely at the micro level before you start weighing up specific sites.

1. Strategy

Remind yourself of the medium and long-term strategies you have developed for your business. Keep your understanding of your business’s customers, purpose and growth prospects top of mind when you are selecting the areas where you will start looking for sites.

Related: Effective Ways To Bring Customers To Your Door

2. Scope

Within those areas, redline any sections where you feel the competition from other businesses will detract from your potential to grow your market. Greenline areas where there are good synergies between the people who live or work there and the demographic that you have identified as your target market.

3. Synergy

Make sure there is clearly a good pool of potential customers for you – size definitely matters when it comes to ensuring that there are plenty of customers available to you. Look specifically for facilities that cater for the kind of customers you want to attract. Sports stores benefit from being close to schools and tertiary colleges, for example.

4. Sight

Although many businesses now have an online element, most still benefit from attracting customers to walk through the door. For your premises to be a good fit for your business, you should be located in plain sight and ensure that your ability to market yourself locally through signage and lamp-post posters is not restricted by local bylaws.

Related: FASA Establishes Industry Specific Food Franchise Forum

5. Security

You will attract and retain good customers and staff if they feel they’re secure in the area. This perception includes factors such as easy, safe parking and a welcoming environment.

“Making a success of your business is not just about the product or your branding,” says Mukheibir. “It can be as fundamental as finding a site that ends up paying for itself. To do this, it must offer you a well-calculated gap in the market where the strong demand for the product or service that your business offers ensures sales and profit. If you have considered all these steps carefully, you will never worry about making rent and wages payment again.”

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Franchisee Advice

6 Things You Need To Know About Profit And Cashflow

Why your business needs both and how to check.

Richard Mukheibir

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In the heat of the action as you build your business or launch a new line, it’s easy to hope some aspects will take care of themselves. It’s especially tempting to fall into that trap with your accounts if you don’t like dealing with figures.

Despite having a B. Comm degree, I’m happy to admit that I don’t really like accounts. I much prefer strategies, management and business development. Fortunately, my co-founder and our Chief Financial Officer Peter Forshaw tirelessly keeps us on track financially – and his message to our franchisees is always that in your own business, you must understand enough of the financial basics to know whether your business is swimming or sinking…

It’s so important that we include this as part of our franchisee training. To get you started, here’s what Engela van Loggerenberg, our Group Financial Manager, tells new franchisees:

  1. Cashflow and profit aren’t the same: You can’t track one and assume the other shows the same pattern. There is no natural correlation between the two – your cashflow can be positive and you can be making a loss or your cashflow can be negative but you’re making a profit.
  2. Cash keeps you going: It’s vital to have money available in your business so you need to be generating enough cash to pay operating expenses. Otherwise you could be making a profit but not be able to pay staff wages. If so, you will either have to put in some of your own money or take a loan to keep your cash flowing and your business afloat.
  3. Time for a checkup: Both cashflow and profit are important to a business – but you can’t do anything without cash which is why you have to manage your cashflow carefully. Check your profit monthly but your cashflow daily. This will alert you to problems in the making so you can head them off. You will see if your clients are overdue in paying their accounts with you, for example. If they fall behind, this could in turn squeeze your ability to pay your operating expenses, which is why cashflow monitoring is such an important tool to keep your business afloat.
  4. Different perspectives: Remember when you look at your figures that profit figures are a result of what has already happened and are usually reported with a time lag of a month. Cashflow is a snapshot of what is happening in your business now and will have an impact on profit figures in the months to come.
  5. Know what you’re looking for: What you need to know are your net, not gross, figures. For net cashflow that is your incoming cash less your outgoing cash for the period. So if you are receiving more than you are spending, you will be left with money in the bank to meet future expenses. Similarly, your total sales less direct costs make up your gross profit. Deduct all your operating expenses from the gross profit to calculate whether your business is making a net profit.
  6. Make the most of your cash: Take pressure off yourself by keeping spare cash for future expenses such as VAT and taxes in a good interest-bearing account such as a money market, call or investment account. Then set up reminders ahead of time to arrange to withdraw the sum required.

Remember that any system is only as good as the person operating it. So if like me, figures aren’t your thing, make sure that you have someone at your side who can manage them for you.

Read next: 4 Factors To Consider Before Converting Your Independent Business Into A Franchise

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Franchisee Advice

3 Ways To Ensure Your Loyalty Programme is Working Hard For You

Plastic cards are making way for app-based loyalty programmes. Is your franchise keeping up with the digitally savvy consumer?

Diana Albertyn

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The average consumer today is a member of at least five of the 100-plus loyalty programmes in South Africa, according to a 2017 study by Nielsen. As the loyalty playing field becomes more cluttered and competitive, what are you doing to ensure each one of your franchisees are catering to customer needs when it comes to loyalty?

Mobility. It’s not the newest buzzword, but it is useful for attracting customers who don’t want to lose loyalty points because their card is lost or not with them. Ailsa Wingfield, Nielsen’s Head of Emerging Markets: Thought Leadership, says that as adoption of non-traditional payment methods increases, loyalty programmes also need to introduce payment type flexibility.

“Mobile payment platforms will increasingly deliver an opportunity for loyalty-programme engagement with consumers, providing a convenient and personalised way for programme members and retailers to engage with one another all along the path to purchase.” – Ailsa Wingfield Nielsen Head of Emerging Markets Thought Leadership.

Related: 11 Ways To Double Your Customers In 4 Weeks

Have you considered what role tech could play in your current loyalty programme? Here are three ways to apply digital enhancements that appeal to present and potential customers: 

1. Offer differentiation through more options

Research has concluded that the loyalty programmes devised by retailers and franchises are not innovative enough to capture the attention of the youth – Millennials and Gen Z. it’s time to diversify your rewards offering. But how?

If your customer base is predominantly younger, being omni-present is key, according to the Truth Loyalty Whitepaper: “An omni-channel approach will not only meet the demands of the younger customer, it will also allow your business to combine intelligence on shopping, search and web behaviour history to assist you in identifying when to offer an in-store promotion, extend a seasonal offer or make a product recommendation through the appropriate channels.”

Implementing a digital loyalty campaign is also a smart way to reduce costs. Coffee shop franchise Mugg & Bean’s Generous Rewards App and partnership with Vitality Active Rewards, means members can earn cash-back rewards to spend on their favourites. Just downloading the app earns you a R25 voucher.

2. Use your tools to engage more

A crucial mistake most franchisors make is not communicating consistently with their loyalty programme members once they’ve signed up and increased numbers. They spend a lot of time recruiting customers to join, but expect them to prompt cashiers for points’ balances and produce their cards independently in their various locations.

“You have gained permission to talk to your customers and created the opportunity to collect enormous amounts of valuable data. Use this to your advantage by creating meaningful and relevant engagement initiatives and communications across your customers’ lifecycle,” advises Truth, a boutique consultancy business specialising in customer centricity and loyalty programme strategy and design.

When enhancing your engagement strategy, Accenture advises that you keep the following in mind:

  • 54% of South African consumers are loyal to brands that actively engage them to help design or co-create products or services.
  • 57% are loyal to organisations that present them with new experiences, products or services.
  • 47% are loyal to brands that engage them in ‘multi-sensory’ experiences, using new technologies such as virtual reality or augmented reality.

Related: 3 Ways To Stop Taking Your Most Loyal Customers For Granted

3. Keep the experience simple

Review your loyalty programme. Honestly. Then ask yourself if you’ve made your programme too complicated for the layman. If your answer is ‘no’ or even ‘maybe’, how can your target consumer ever reap the full rewards of this programme if they don’t understand the rewards on offer and how to redeem them?

Changing rules too often is the first complication to go. No matter which one of your stores they choose to shop at, the redemption and earning process should be simple enough to keep members interested and engaged in the programme. Make sure you keep your programme simple and transparent.

“Clicks made a simple but fundamental change to its redemption process – paper-vouchers were replaced with virtual points that can be redeemed as cash-back when you swipe your card at the till. While Clicks and Dis-Chem are among only a handful of brands that do this, it’s a sure-fire mechanism for increasing redemption,” said Amanda Cromhout, founder and CEO of Truth.

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