Franchising offers entrepreneurs an opportunity to own and operate a business under an established brand. It provides a framework for success, allowing individuals to tap into a proven business model while benefiting from the support and expertise of the franchisor. One critical aspect of this collaboration is local area marketing (LAM), which involves tailoring marketing efforts to specific regions or individual franchise locations. However, the question of who owns the brand—franchisor or franchisee—often arises when discussing the challenges and strategies of franchise local area marketing.
One of the primary challenges in LAM is the collection and allocation of marketing levy funds. Franchisees contribute to a central marketing fund, and transparency in showcasing how these funds are spent and the results achieved is crucial. The equity of distributing marketing funds across the network is another obstacle. Should it be based on the number of stores, revenue generated, profit earned, or the cost of media? Striking a balance and ensuring fairness is essential to maintain a healthy franchise system.
Getting buy-in from franchisees is another hurdle faced in LAM. Franchise Advisory Councils can serve as a platform for open dialogue and decision-making, but it’s crucial to treat every franchisee equally, considering their unique circumstances and perspectives. It becomes even more challenging when dealing with difficult or negative franchisees who may not fully understand the collective benefits of marketing efforts. Responding to breaches of the franchise agreement while ensuring the success of the entire franchise group requires finesse and effective communication.
To capitalize on the demand generated by national marketing campaigns, LAM becomes essential. It addresses local problems and opportunities, acknowledges that each store and area is different, and connects the brand to the local community. By personalizing the brand and building relationships with customers, franchisees can improve retention and acquisition in their specific areas. While national campaigns are vital, LAM taps into the power of one-to-one marketing, optimizing sales potential on an individual store and franchisee level.
There are four primary ways to utilize local marketing effectively. Firstly, LAM can boost the impact of national advertising by tailoring messages to resonate with the local audience. Secondly, it can drive sales during periods when no national marketing campaigns are planned, ensuring a consistent flow of customers. Thirdly, LAM allows franchisees to target customer segments that may be overlooked by head office marketing efforts, maximizing their potential in niche markets. Lastly, maintaining a strong connection with the local community through LAM can foster loyalty and goodwill.
Franchisees often hesitate to engage in LAM due to a number of barriers. Some believe it is solely the responsibility of the franchisor, failing to recognize the importance of localized efforts. Others cite lack of time, knowledge, or resources as obstacles. Overcoming these barriers requires franchisors to provide robust support systems. This can include LAM kits that provide turnkey promotions and advice, a dedicated local marketing support hotline, proactive assistance, mentoring through cluster marketing groups, workshops and training, recognition programs, assistance with store openings, lead generation programs, and guidance on store signage and presentation.
Five examples of well-known companies that emphasize local area marketing for their franchisees:
Boost Juice: Boost Juice is a popular Australian juice and smoothie bar franchise. They often conduct local area marketing campaigns to promote their stores in specific regions. This can include sponsoring local events, distributing flyers and coupons in the local area, and collaborating with nearby businesses to cross-promote.
Jim’s Mowing: Jim’s Mowing is a well-known franchise offering lawn mowing and gardening services in Australia. Franchisees often engage in local area marketing to attract customers in their designated territories. They may distribute flyers and door hangers in residential areas, advertise in local newspapers or community noticeboards, and participate in local gardening or home improvement expos.
Domino’s Pizza: Domino’s Pizza is committed to local store marketing and provides franchisees with tools and resources to run effective local campaigns. Franchisees are encouraged to leverage social media, online advertising, and targeted promotions to connect with their local customer base.
Anytime Fitness: As a fitness franchise, Anytime Fitness focuses on local area marketing to attract members to their gyms. They may run location-specific social media campaigns, offer free trial passes to local residents, or collaborate with local fitness influencers to generate awareness and drive foot traffic.
The UPS Store: The UPS Store franchisees often implement local area marketing strategies to target small businesses and individuals in their communities. They may host workshops or seminars on topics relevant to local businesses, distribute informative newsletters, or provide special discounts to local customers.
To foster franchise success, it is crucial to encourage franchisees to share best practices and engage in benchmarking activities. Building strong relationships between franchisors and franchisees, and amongst franchisees themselves, is critical. Franchisees want to feel heard and valued and providing them with platforms for communication and input can significantly enhance their motivation and commitment. Moreover, franchisors must make franchisees aware of the resources already available to them and encourage them to diversify their marketing approaches. Relying solely on one method can limit their reach and potential.
To summarize, franchise local area marketing is a collaborative effort where franchisees play a pivotal role alongside the franchisor. Their knowledge of the local market, ability to adapt marketing strategies, and personal connections within the community are instrumental in building brand awareness, driving customer engagement, and ultimately contributing to the success of the franchise.
Dr. Nigel Bairstow is an academic practitioner with experience working in a variety of marketing roles for large multinational companies such as Alcan Aluminium, Komatsu, Atlas Copco, and 3M. He completed his PhD in Marketing in 2012. His research focus is on B2B and B2B marketing channels.
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