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Researching a Franchise

Franchise Marketing Essentials

Look for these qualities before you make an investment.

Jeff Elgin

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Mandatory centralised marketing programmes are probably one of the greatest strengths of franchising. Pooling funds from all of the franchisees in a system gives them, collectively, much greater marketing power. This central fund can be used to do things that no single franchisee could afford, like running television advertising campaigns. The fund can also be used to hire experts to produce advertising materials of far better quality than what an individual owner could create.

These funds can also be a great source of conflict though, because franchisees often feel that the pooled money is not being spent in the way they think it should be. This can be a huge issue in any franchise system, especially in a recession when all advertising tends to be less effective than in better times.

So it is essential for anyone contemplating a franchise investment to know in advance that the company’s marketing system is a good one. The following are five essential qualities of a good franchise marketing programme:

1. It drives customers

Plain and simple, the number one question for any franchisee to ask is whether or not the marketing fund brings enough people through the door to make the business successful. If the answer is yes, conflicts will be kept to a minimum. If the answer is no, watch out for World War 3.

2. It involves the franchisees

Successful franchise marketing programmes typically give franchisees substantial opportunity to weigh in with their opinions. The ultimate decision-making authority is normally still reserved for the franchisor, but well run funds get plenty of input from the people closest to the customer – the franchisees. You should look for at least a franchisee advisory group (elected or appointed) that meets with the company’s marketing executives regularly to provide input on future projects and campaigns.

3. It gets the splits right

Marketing fund rands are used primarily for three things. First, they cover the costs of administering the marketing effort (internal expenses, agency fees, etc). Second, they cover the costs of producing advertising materials (print, direct mail, radio and television ads, etc.).

Finally, they pay for media purchases to place these advertisements for the benefit of the contributing franchisees.

A common franchisee complaint is that too much is being spent in one of these areas and not enough in another. For example, the fund clearly needs to produce high quality promotional materials, but if all of the money is spent on production, there won’t be any left to deliver these wonderful materials to consumers. There obviously has to be a reasonable balance between these two needs.

Another common conflict is over the amount spent to promote ‘brand-building’ advertisements versus the amount spent on ‘customer attraction’ advertisements.

Many marketing department executives seem to favour the first approach, whereas most franchisees strongly favour the latter. So again, if there’s not a reasonable balance between these two needs, massive conflict can result.

4. It is well documented

A well thought-out and proven franchise marketing system will be carefully documented by the franchisor. Though they probably won’t provide you with all of their proprietary internal marketing documentation, you can request at least the table of contents of the marketing support manuals they provide to franchisees. This will give you a good idea of the scope of the strategies they address in training franchisees to market effectively. It will also demonstrate that they have perfected their systems to the point where they have documented them in manuals and other support and training tools.

5. It validates well

The surest way to find out how well the marketing programme is working is to get on the phone and start asking the existing franchisees. You’ll find that they will be very forthcoming on this topic since few things are closer to their hearts than marketing.

Be specific and ask them how well the marketing works in terms of driving customers into their business. Also ask if they think they’re consistently getting good value from their contributions to any required marketing fund. If you find a franchise system where the majority of the existing franchisees are unhappy about the way their marketing funds are being managed, you can safely assume that you’ll end up unhappy as well if you become an owner. Do yourself a favour and find another company. On the other hand, if most of the franchisees are pleased with the way the marketing fund is handled by the franchisor, that’s a great sign. You’ll often find that if this is the case, the franchisees are happy about most other factors in their business as well.

The topic of marketing is probably one of the most important you’ll address in your search for a franchise opportunity, so expect to spend some time on it. If the marketing materials are of good quality, if the systems are effective and well documented and if the end result is working well in terms of driving new customers into the business, everyone will be more than happy to give you lots of information about the marketing systems. If things are not going well, you’ll find that they want to move off this topic and onto something else as fast as they can.

Take your time and make sure you know whether or not you’re dealing with a good marketing programme. This is no small matter, since your livelihood will rely on the success of the marketing programme in driving customers to your business. The time and diligence you invest in this area can pay big dividends in the long run, and you’ll be happy you made the effort.

Jeff Elgin has developed a consulting system that matches pre-screened, high-quality prospective franchisees with the franchise opportunities that best fit their personal profile.

Researching a Franchise

Col’Cacchio – Benefits Of The Franchise Model

Six key benefits of the restaurant franchise model – and what to look out for when considering a franchise.

Russell Otty

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For investors looking to the restaurant industry and considering a franchise knowing it has a proven track record and is therefore possibly a lower risk, there are a few key things to be aware of about the benefits of the franchise model, which if investigated, can also point to a franchise that is not for you.

Russell Otty, Chief Operating Officer of the Col’Cacchio Group, shares some of these key benefits and indicators of whether a franchise is for you:

1. Making the cut as a franchisee gives you the confidence that you are making the right decision

You may think psychometric testing, three days in a restaurant following a franchisee around, and a panel interview with the senior management of the franchisor, is a bit over the top, but the franchisor that puts you through your paces and assesses your ability and commitment to running the business, is doing you a huge favour and may even help you see this is not for you. It goes both ways, and after an intense courtship, you should know if you want to try a long-term relationship.

Related: Col’ Cacchio: A Passion For Pizza

2. Assistance with location selection and negotiation of the terms of your lease

One thing you can do to limit your risk is to not open a restaurant in the first place if your rent is not going to be reasonable or you simply won’t get customers through the door. The franchisor will vet and approve the site – they will have extensive insight into what has worked or not worked location-wise for their brand, and can assist you to weigh up the area and it’s potential to attract customers.

The commercial terms of a lease is very important – you can’t be too ambitious about turnover targets, and having the backing of a franchisor can be beneficial if a landlord becomes unreasonable.

3. Staff training and development tools on hand

Consistency is important with restaurant franchises, as a customer visiting a brand anywhere in the country, goes there knowing exactly what they are going to get. This is best achieved with solid training, perhaps access to resources such as training videos, and regular visits from franchise managers.

You should check with your franchisor what level of training and franchise support you will have on an ongoing basis. Ask about the ratio of field trainers and operations managers to the number of franchisees in the group. You want the franchisor in your restaurant in some shape or form, two or three times a month, whether it be the training manager, the regional franchise manager or the national operations manager.

4. Access to supplier networks to manage your input costs

Negotiating basket pricing with distributors regionally and nationally, the franchisor will leverage their buying power on your behalf. They should assist to manage your suppliers and make sure deliveries happen on time, and ensure that product quality remains consistent. They can also negotiate to ensure your input costs do not increase before the next menu launch – so you can ensure your margins remain intact.

5. Brand loyalty and locality marketing

When you buy a restaurant franchise, you gain a group of customers who know who you are, the food you serve and the way you make them feel. The money you will pay towards marketing each month gives you insight into the broader restaurant market, the experience of what is working across a number of sites, and how best to keep the attention of new and existing customers.

Some franchisors offer locality marketing assistance – your site and area has specific needs that other outlets may not have, or there may be events in the area that can be leveraged to run special offers. Ask if the franchisor offers this as a service, as it can assist you greatly to have an advantage over other restaurants in your area.

Related: Beginners Guide To Digital Marketing In South Africa

6. Business development insights

The franchisor has access to insights gained across the group, and the systems that they have in place to track costs and increase profit margins, can be of huge assistance. If you are looking for business support, a franchise manager can be the one sitting with you telling you that you spent R2 000 too much on cleaning this month or saying you need to wait till next month to make that purchase. The level of business support you will have access to, is an important factor to consider, depending on the level of support you may require.

Recipe for success

Nine times out of ten, a restaurant franchise that fails, fails because the franchisee loses interest or lacks the commitment to make it work. Selecting the best franchise for you as the investor, or as a restaurant entrepreneur, is the most important first step you can take towards success, so do the homework.

Don’t assume that because you are buying into a successful brand that it will be a success – business is not an exact science – you need to do your own due diligence and take responsibility for your business, because it is after all your own investment.

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Company Posts

We Want To Invite You To Join Us On The Hi-Q Journey And Become A Franchisee

As the leader in the tyre replacement and service industry, we are invested in providing our network with the tools needed to thrive and grow in an ever-challenging market.

HI-Q

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Vital Stats

This is an invitation to all innovative entrepreneurs who are seeking new and exciting opportunities – here’s your chance to become part of a winning team.

As the leader in the tyre replacement and service industry, we are invested in providing our network with the tools needed to thrive and grow in an ever-challenging market.

The Hi-Q Way

  • Hi-Q’s been voted the 1 tyre retailer by South African consumers in the Ask Africa Icon Brands Survey from 2010 – 2017.
  • Over the years Hi-Q has established itself as ‘the one you can trust’, with customers, the network and suppliers.
  • Hi-Q prides itself on first-class service, a multi-product/multi-brand offering as well as ground-breaking product innovations such as TyreSurance on all tyre brands.
  • Hi-Q has an extensive network of over 130 franchisees
  • Hi-Q has the support of the Goodyear value proposition.

If you are looking to join a new franchise and you share Hi-Q’s values and vision, please get in touch.

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Puré Frooty Ready To Launch In South Africa

Puré Frooty Smoothie is a unique business model to the South African market. A delicious, fruit filled smoothie will be created at the touch of a few buttons.

Pure Frooty Smoothie

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Vital Stats

Puré Frooty Smoothie is a unique business model to the South African market. A delicious, fruit filled smoothie will be created at the touch of a few buttons.

This innovation in the healthy smoothie industry is ground breaking for South Africa. The machine is manufactured in Australia by a highly skilled team. It took six years to perfect this business model for the consumer market.

The vision of Puré Frooty Smoothie is to offer convenient on-the-go smoothies for anyone. The experience and quality will always be of the highest standard. We aim to be a staple convenience in malls, schools, office parks and hospitals. This is a platform that will allow for self-growth for passionate entrepreneurs.

Our mission is to create a unique customer experience. We want to satisfy the nutritional needs of customers by providing quality smoothies. Puré Frooty Smoothie will be packed with all the goodness a smoothie should offer.

Related: Why Your Franchise Should Adopt A Shared Value Business Model

The four values we pride ourselves in are:

  1. Convenience
  2. Consistency
  3. Quality
  4. Customer Satisfaction.

Puré Frooty Smoothie was an idea, researched widely, by people looking to simplify the business process for the consumer and business owner. There was a gap in the market for simplified customer service and a demand for a quicker turnaround time.

For an entrepreneur it can be very overwhelming to start or buy a new or existing business. There are so many crucial decisions that need to be made from the beginning and new concepts to adapt to. Puré Frooty Smoothie simplifies that drastically. The business model revolves around a free-standing vending machine which needs to be visited to refill and maintenance. There is no need for shop fittings or a large work force. All that is required is an inside space for the machine with a power supply. In terms of a work force, you could either do it yourself or have one person to assist you. There is also a part time involvement where refill station teams can refill and maintain the machine.

The business is completely cashless so there are no worries of a note jam, full cash canister or insufficient denomination rand values. More importantly the machines would do a higher turnover than an ordinary vending machine so safety of no cash is important. A cloud-based system is linked to the point of sale which allows you to monitor your performance and stock from the back-office platform at any given time.

With a live point of sale system, the business is linked to a software which monitors the operations of the machine. Should anything malfunction an immediate notification will be sent with a diagnostics report.

Related: SA Fast Food Franchising On The Rise

Everything is done with a computer which leaves little to no room for errors. It is self-order and very user friendly.

A vending machine which can produce a delicious smoothie in forty seconds. An informative touch screen ordering panel which displays all the nutritional information of the smoothie ordered and has the current news and weather. No time wasted for the consumer. In fact, it’s a learning session disguised as a waiting period. The machine has two wash cycles after every smoothie is made to be freshly prepared for the next smoothie, business hygiene is important.

Consumers live in the fast lane. We are looking for something quick and most times we would like to be healthier. With the hustle and bustle of today’s life every little bit helps. Puré Frooty Smoothie fills that gap in the market.

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