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.
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.
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.
What To Know About Franchising Your Business
For many businesses, franchising is an excellent route to growth, opening up new opportunities and markets. Laurette Pienaar, National Franchise Manager at Nedbank, unpacks why it’s worth considering this route.
- Player: Laurette Pienaar
- Position: National Franchise Manager
- Company: Nedbank Limited
- Visit: nedbank.co.za
What type of business is ideally suited to the franchise model?
Franchising has been proven successful across all industries, including the automotive, food, entertainment and retail industries. However, several key qualities ultimately determine a concept’s ability to successfully become a franchise.
Firstly, the business model must be scalable and able to be repeated in several locations. Secondly, there must be demand for the products sold and, thirdly, the franchise model must be proven as profitable.
Why is franchising a good growth option?
Franchising is often used as a cost-effective growth strategy for businesses. A key benefit of this strategy is that no capital layout is required for a new franchised store as opposed to corporate-owned stores.
Franchised stores are also proven to be more successful than corporate-owned stores. This is mainly due to the fact that the franchise owners have a vested interest in the store, whereas corporate stores are supervised by a manager. Franchising is therefore also a great way to build your brand.
What should business owners focus on?
Franchisors should set up good infrastructure to support their franchisees, including good upfront and ongoing training to both the franchisees and their staff, the correct legal advice and assistance, and a strong operational team to assist franchisees daily.
Many successful franchisors provide support by expanding through vertical integration, which provides franchisees with logistics, supply chain security and product consistency.
Several franchisors advocate a structure with both franchisee and corporate-owned stores. This enables a franchisor to keep in touch with the daily challenges franchisees experience and new products and solutions can be tested at a corporate store before being rolled out to the franchise network.
How can franchising consultants assist business owners?
Franchise consultants provide daily operational support to franchisees. They are responsible for daily store visits to assist with quality checks, process flows, supplier relationships and, often, financial assessments. They are a helpful soundboard on any improvements to be made in the business model and can convey suggestions to the franchisor.
What challenges should business owners be aware of?
Businesses looking to franchise need to ensure that their business is teachable to others. Overcomplicated products and systems may deter franchisees from investing in your brand.
Franchisors have to do ongoing introspection regarding their company culture. For example, does the culture promote innovation and inspire franchisees and consumers, which ultimately is a culture worth investing in?
New franchisors’ selection criteria for franchisees are often not sufficiently thorough and comprehensive. For a new franchisor, it is important to choose good quality franchisees and to have strict selection criteria to ensure that your brand remains reputable and stable during fast-expanding cycles.
What lessons can be learnt from SA’s successful franchises?
Businesses looking to expand through franchising should consider setting up several corporate-owned stores first. This assures potential investors that your business is based on a proven model with a track record and supportive infrastructure.
There is not always a one-size-fits-all model. Many franchisors have created custom models to accommodate and adjust to the need of a specific property or consumer market. A great example of this would be the food industry where many franchisors offer shopping centre concepts, drive thrus and kiosk or express concepts. Consider this when developing your model.
Develop Digital Marketing Competency In 3 Simple Steps
Conquering the digital revolution needn’t be daunting. Polish up your tech skills and watch your digital marketing prowess increase throughout your franchise.
As a franchisor, digital marketing may be proving to be a challenge due to the unique structuring of the business.
“The very nature of franchises is ‘structured’, however, when it comes to marketing, that structure often lacks,” says Marcela De Vivo, Founder and CEO of Gryffin Media.
Franchisors and franchisees often struggle to reach common ground when looking to achieve different marketing goals. While the franchisor needs to control the brand in its entirety, the franchisee wants to market their business using particular strategies suited to their location.
Research has found that smartphones are the biggest influencers of 82% of users when they make their in-store purchase decisions while. It’s for this reason that the importance of digital marketing for franchises has increased.
Here’s how to harness its power of influence, amplify foot traffic and solidify brand loyalty:
1. Recruit digital natives and early adopters
As much as you’re the leader of your franchise network, there are franchisees in your chain you could learn from. The global increase in millennial franchise owners means it is highly likely that you’ll be able to identify early digital adopters within your franchise network.
“The best people to learn from are those who have been in your shoes before,” says Matt Forman of the Franchise Centre at Griffith University.
“Encourage and support their efforts and use them as case studies to demonstrate to the rest of your franchisees the value of digital marketing, and how to do it right.”
2. Invest in training your team
“Each digital competency level requires more education and resources in order to integrate digital marketing with your physical stores,” says Forman. For this reason, regularly investing in continuous training for your team so as to ensure they keep abreast of any new and emerging trends.
Proactivity and adapting to the constantly evolving digital landscape led KFC to open a LinkedIn account for its founder and mascot Colonel Sanders. KFC’s out of the box tactic is a fresh approach to what has long been considered a B2B platform, under-utilised as a B2C platform.
3. Apply custom targeting techniques
The discovery of new and small businesses is being fuelled by Google searches, social media and online reviews, making these platforms a goldmine of invaluable tools.
Leveraging certain custom targeting techniques like easily searchable keywords and exposure on other reputable and high-traffic websites, gives your franchise’s digital marketing efforts a boost. This results in an effective campaign, favourable reviews and meaningful and lasting interactions with consumers “whether it’s a reply to a Facebook comment or a retweet,” says Entrepreneur’s Emily Conklin.
How To Hire Skilled Workers For Your Franchise
Your staff run your business – you just have to show them how. This is why employing the best people for the job is essential.
According to the Franchise Association of South Africa (FASA) 2017 Franchisor Survey, one of the main challenges facing franchisees is finding the right staff.
“Staffing your franchise can be one of the most challenging parts of running a successful business. Without a great team of employees, you cannot run your business effectively,” says Saxon Marsden-Huggins, founder of WebRover.
These three tips could help you find the best employees for your franchise outlet:
1. Don’t hire in haste
While you may be rearing to go and keen to fill gaps to speed up profitability, research your candidates thoroughly.
As the job applications keep flowing into your inbox, keep in mind that not all of them qualify for the positions available – it may even be a small percent who are actually viable candidates. This is why your hiring process should include:
- Taking the time to thoroughly screen CVs to develop a short list
- Creating a carefully crafted list of interview questions
- Setting aside adequate time for thorough interviews
- Getting to know the candidates through a second round of interviews to confirm your choice.
Giving the hiring process dedication and attention will ensure you get the cream of the crop, contributing to the long-term success of your franchise.
2. Demonstrate support in the workplace
While you can instil the necessary skills into new recruits, it’s difficult to train for culture. This is why choosing the right employees from the beginning will make the rest of your franchise management system will run more smoothly.
“The manner by which you run the franchise will influence employee perceptions of the brand as well,” says Hireology’s Erin Borgerson. “Your staff must become ambassadors of your franchise system to attract the target consumer market.”
The best way to do this is encouraging staff to give you their honest feedback. Your commitment to creating and upholding a positive culture will result in increased loyalty from your current staff and a superior pool of applicants.
3. Offer appealing incentives
When advancement opportunities are clearly communicated, staff is keen to hear how they can get there, as they have career goals of their own. Encouraging this ambition will draw good employees to your franchise.
“Helping employees understand the steps to advancement helps them to view their current job as an important part of a career with an upward path, not just a pay cheque for this week,” say financial reporting technology experts at Qvinci.
Performance bonuses and employee benefits incentivise staff’s efforts, therefore increasing their income alongside the profit of the business. “This serves to make employees a part of the business and not merely people ‘who work there’,” they explain.
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