If you’re interested in becoming a franchise owner, it’s important to understand the basics of franchise advertising so you can know what to expect.
Advertising refers to the process of promoting a product, service, or brand to a target audience with the aim of bringing awareness and influencing consumer behavior.
Stephen Leacock, Canadian humorist popular in the early 20th century, gives a more cheeky definition: “Advertising: the science of arresting the human intelligence long enough to get money from it.”
While it’s generally important for a business to have an advertising plan, the exact strategy will depend on each business’s goals and circumstances. Various advertising formats include: traditional and digital marketing, free and paid advertisements, email marketing, content marketing, referral and customer loyalty programs, and more.
Most advertising campaigns aim to increase brand awareness and/or bring more customers to a business. While franchising advertising has the same goal, it also comes with some unique advantages as well as challenges.
Benefits of Franchise Advertising Programs
Key advantages to franchise advertising include:
- Brand Recognition – Owning a business with an already reputable brand can put you on the path to business success faster than starting a business from scratch.
- Cost-Effective Advertising – You will likely save money on advertising efforts because you’re joining a franchise that has an already proven system. Additionally, there are many franchisees contributing to the advertising fund, which will lower the cost for everyone.
- Brand Consistency – You can count on the franchise to ensure the brand is represented consistently at every location.
- Larger Reach – Franchises often implement national ad campaigns, which gives individual franchise locations a greater reach compared to businesses limited to local advertising.
While franchisees must comply with particular advertising restrictions, this is generally worth the benefits that franchise advertising has to offer.
Common Franchise Advertising Difficulties
A few hurdles that a franchise might face in its advertising strategy include:
- Weak Synergy Between the Franchisor and Its Locations – This refers to brand consistency among all franchise locations. However, when done correctly, this is a huge advantage to franchise advertising.
- Adapting to Local Markets – If a franchise is unable to customize their efforts when needed to cater to the local market, this could handicap their advertising approach.
- A Long Approval Process – If the franchise does not have an effective system of communication and a seamless approval process in place, this could cause frustration and delays in the advertising strategy.
Advertising Fees – What You Need to Know
Most franchise systems require their franchisees to invest in advertising, although the specifics will vary from franchise to franchise. The following questions and answers give some clarification on what that can look like.
- Who provides and pays for advertising and promotional items?
The franchisee pays the franchisor a fee in exchange for advertising and promotion of the brand. This fund is generally used to promote the brand on a national level, which collectively benefits the whole franchise system. Keep in mind that franchisees are typically required to pay for their own local advertising and promotional efforts.
- What is the average advertising fee?
While advertising fees vary with each franchise brand, they generally fall between 1-5% of the franchise’s total sales. Some franchises will have minimum or maximum fees set up, while others don’t require an advertising fee at all.
A couple of examples of FranNet verified brands: Home Clean Heros charges a 2% advertising fee while FastSigns’ fee is 1-2%.
- What is typically included with the franchise advertising fee?
In many cases, the brand will handle national advertising while leaving local advertising up to the individual owners. For large franchise brands, the advertising fee could cover national, local, and regional marketing efforts. Regional (or cooperative) advertising refers to a campaign that targets a specific geographical area.
Some examples of the types of advertising services the franchisor oversees include: TV commercials, brochures, billboards, print ads, public relations, website development, online ads, and more.
- Where can you evaluate a franchise’s advertising fee?
You can always find the advertising fee details laid out in franchise’s FDD. Additionally, Entrepreneur 500 publishes a study each year that allows you to compare the various details and fees for all major franchises.
Remember that you get what you pay for, and each individual’s needs will be different. A major franchise with a higher advertising fee might mean the franchisor will handle everything, which takes one thing off of the franchisee’s plate. However, a franchise with a smaller fee might allow the franchisee more flexibility to spend money in their local markets. The right option will depend on each individual’s goals and abilities.
FranNet has hundreds of verified brands that you can explore. Our expert franchise consultants are available to help match you with the right franchise brand.
How Does Trademark Protection Affect Ad Development?
A franchise solidifies ownership of the brand by trademarking the images, sayings, and other intellectual property elements. As a result, they enforce specific rules on how a franchisee can use those trademarks. These details are found in Item 13 of the Franchise Disclosure Document (FDD).
Although buying a franchise business with an established brand provides many advantages, franchisees will need to sacrifice some advertising creativity. The franchisor might welcome their input on how to improve ad campaigns, but in general, franchisees can’t use the franchise’s trademarked property for their individual business name, domain name, homepage, electronic address, hashtags, etc.
Want More Information About Franchise Ownership?
Are you interested in buying a franchise? It’s worth taking the time to understand the different aspects of franchise ownership including the fees involved. FranNet can help! Our franchise consultants offer the support and resources you need to make the right decision – from evaluating the various fees to understanding how the franchise will help you succeed. Even better, you won’t need to pay a dime for our services! Schedule your free consultation to get started!