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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.

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Researching a Franchise

Maximise Your Social Media Reach This Holiday Season

Quick and cost-effective, social media is your best tool to reach target markets when it matters most – during the holidays.

Diana Albertyn

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It’s not just the end of the year that can be lucrative for businesses. School holidays and other major breaks during the year present consumers with more time to spend shopping. Why not ensure money is spent at your franchise by capitalising on the minimal cost and maximum exposure of social media?

You don’t have to create entirely new deals or promotions from what you may already have running on your store, but find a way to make it special for your social media followers, suggests Kelly Mason, marketer at Customer Paradigm.

Holiday campaigns on Twitter, benefitting from popular hashtags, streaming live content, and receiving information instead of just distributing it via social media are just some of the ways to stay ahead of the competition.

Related: Why Your Business’ Social Media Marketing Strategy Is Probably Wrong

Know your customers well

The first step to attracting customers and getting them to complete a sale is understanding their customer journey.

“Being able to document where they spend their time online, which social channels they use most, and what they’re reading or watching on those channels is a huge plus. Finding that crucial information is fairly easy to do, thanks to modern-day marketing tools and resources,” advises Paul Herman, ‎VP: Product and Solutions Enablement Group, at Sprinklr, a unified customer experience management platform for enterprises.

The better you understand your customers, the easier it is to reach them through a campaign optimised for their interests.

Master social listening

You could be using social media all wrong in the run up to all your holiday campaigns. Perhaps it’s time you used this platform to listen to your customers?

“Through social listening, marketers can identify major trends and product keywords in their industries,” says Herman. “For instance, knowing those keywords can help marketers identify which social platforms are more popular for a target audience. With that information, they can make smarter decisions about where to spend their money and which products or services to promote on each platform.”

Related: 10 Laws Of Social Media Marketing

Use the information gathered to determine what customers like about your product, what they dislike about it, and how you can improve upon it so they can buy more of it. The more of this data you collect, the better and more effective your interactions with customers will be.

Try something new

50% of consumers look for a video of the product they want to buy before going to an ecommerce store to buy it, according to a 2016 Google survey. “Video can be an extremely effective way to get your customers to take action – in this case, to make a purchase with your store,” adds Mason.

Video adverts are often used as an experimental tool in social marketing and switching it up on platforms such as Facebook Live, Instagram Live, Instagram Stories, or Snapchat – depending on your brand’s activity and your audiences’ interests – can help attract customers during seasonal periods.

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Researching a Franchise

Selling Your First Franchise? Consider These Key Pointers

You’re ready to franchise your business, but who do you sell to and how? Your first few franchisees may be the hardest to acquire, but the process will be smoother if you get some basics right.

Diana Albertyn

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Business experience gained running your independent brand will come in handy, but looking for franchisees is a different ballgame. “We have to attract the right people in enough numbers to make the difference; and, the key to more leads is to have a multi-prong strategy to marketing,” says franchise strategist and expansion expert Lizette Pirtle.

Using media (social, or otherwise), trained experts in franchise sales, and keeping in mind that whoever you sell to will become an extension of your brand, are important considerations before selling your to first franchisee:

1. Use (all) media wisely

Website marketing, print advertising and social media are just some of the many different ways to attract potential owners to your franchise. But the most cost-effect of the three may be a ‘tweet’ or ‘post’ away, says former Director of Marketing at the International Franchise Association and owner of Burris Branding and Marketing, Jack Burris.

Related: To Buy Into A Franchise Or Purchase A Licence? 3 Factors To Consider

“Three out of four people using the Internet are either on Facebook or LinkedIn or Twitter or all of them. Take advantage of social media,” he says.

“There’s typically no cost to play in the space except for the time that you need to invest to build your brand with a social media presence.”

2. Seek out franchise coaches or brokers

While this is a more traditional method of making reliable franchise sales, it’s a great way to form lasting associations that will take you beyond your first few sales. “Using broker networks is a great way to supplement your own efforts. However, you must spend time developing relationships with these people if you want to get results,” advises Pirtle. “Don’t think that just listing your opportunity with them is sufficient.”

Franchise coaches and brokers have multiple options for potential franchisees, so to put yourself high on their list of consideration when prospects enquire, you have to form memorable relationships.

Related: 3 Factors To Focus On When Opening Your First Franchise

3. Always consider the bigger picture

Out of all the people your marketing efforts attract, always keep in mind that few will check all the boxes and compromising could cost you in the long run.

“The franchise relationship is a long-term one. If you’re going to be successful as a franchisor, you should start with the attitude that every franchisee will be someone who you’ll have to live with for years to come. And nowhere is this philosophy more important than when awarding your first franchise,” says Mark Siebert, CEO of the iFranchise Group, a franchise consulting organisation.

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Researching a Franchise

3 Factors To Focus On When Opening Your First Franchise

To become a successful franchisee, there’s lots more to learn. Take notes and this will be an adventure still with its challenges, but less stress.

Diana Albertyn

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Experts and those who’ve gone through the launching, managing and successful running of a franchise will tell you that owning a franchise can be just as risky as owning an independent small business – and it doesn’t get easier after signing on the dotted line. But that doesn’t mean it isn’t worth giving franchising a shot.

“The hardest part of being a franchisee is learning and adopting all the processes that exist in the brand you’re buying into. But it’s important that a customer can walk into any franchisee’s property across the country and have the exact same experience,” says Jeff Chew, Pizza Factory franchisee.

With that in mind, remember the financial, emotional and physical investment you’ve made in this new venture and let it fuel your success, from before you even serve your first customer

1. Financial and intellectual wealth

Don’t buy into a franchise where you might be undercapitalised, advises Paul Durant, a Junk King franchisee.

Related: Expansion Funding Options For Your Growing Business

Keep in mind that running a new business isn’t challenging only mentally strenuous, but financially too, because you’re not always immediately profitable. Ensure you have enough runway for a few years at a loss or minimal profit.

“I did not do a thorough job in my initial research and discovery calls. I used a lot of my own assumptions and luckily they were fairly close,” recalls Durant.

“I would, however, suggest that you ask very detailed questions during the discovery process and listen carefully to the responses. Often what is not said is equally as important as what is said.”

2. Remember the purpose of the manual

The point of buying into the concept you’ve chosen is to ensure success based on a roadmap that’s already been drawn out for you. Straying from this plan unnecessarily is a shortcut to failure. This doesn’t mean you cannot make changes, but always ensure your growth is where it needs to be by following the system completely.

Franchisee Mark Arduino thought he was taking the advice he’d been given countless times: Just follow the system. But he quickly realised he wasn’t when all the franchise-specific training he’d been through was forgotten in favour of easier shortcuts.

“Then I realised my mistake. I came to see that it’s very user friendly. I’m sorry I didn’t use it from the start!” he says.

Related: How To Choose The Right Finance For Your Business Or Property Portfolio Expansion

If you think you have a better way of doing something detailed in the franchisee manual, do your research. Your decision should follow a discussion with your franchisor, then align to the business plan.

3. Learn at every opportunity

It’s great that you have previous experience in business. It’s a huge bonus that could put you ahead of other franchisees in your network. But, always be willing to learn and put your hand up or open a book if you’re not sure. A vast business background doesn’t guarantee automatic success as a franchisee, so be open to learning from others.

“I have learned more from two of the franchisees in my area than I could ever have imagined and I owe my early success in large part to their willingness to help,” says Jeff Steele, a CMIT Solutions franchisee.

It may sometimes seem like you can do it all on your own, but even when you feel you can do anything, you cannot do everything. That’s why you joined a franchise that (hopefully) offers good support structure.

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