The Franchise dilemma

Franchisees are constantly looking for support and transparency around the value they are receiving from paying royalties and management fees to franchisors.

For franchisors, the challenge is managing the day-to-day operations of the business - while demonstrating to their franchise network the value they provide in terms of systems and marketing support.

However, there is a fine balance between demonstrating value through national marketing campaign management, and being a burden on local sites to actually execute these campaigns themselves at a store level.

This dilemma is increasingly prevalent in franchises and requires the role of head office to be more of an enabler, helping local sites market to their customers in a more agile and dynamic way.

Paola TannerPaola Tanner, who has been partnering with franchise chains for over 15 years through her role as director of marketing platform provider Fuse, believes the secret of demonstrating value lies in empowering franchisees to localise marketing  campaigns to tailor messages to their customers in a seamless way.

“Franchisees want support, and they expect head office to help empower them with tools to drive more customers to their stores. Head office creates national campaigns, but often the local business owners are overwhelmed with the administration involved to execute the campaign in their store.”

Franchisors need to provide local sites with the autonomy to customise local activities to their community. “The best way I have seen this executed is giving local sites the ability to participate in national campaigns with collateral that is relevant to each local area” explains Tanner.

Implementation is also a critical factor in empowering franchisees. Franchisees need a quick turn around on point of sale orders, while head office need to work with longer lead times so they can get bulk buy cost efficiencies for the network. Cost  efficiencies and speed to market aren’t always easy to reconcile, so many franchise marketing teams put these opportunities in the ‘too hard basket’.

Tanner believes, “A little planning can go along way, as can having the tools to facilitate quick communication between franchisees and head office on point of sale requirements. Franchises can save thousands by leveraging the buying power of the network, rather than ordering point of sale in dribs and drabs.”

Franchises also are grappling with the idea of embracing new marketing technology such as SMS, email marketing and social media and are wanting to explore multi-channel marketing campaigns.

“We are seeing many franchisees wanting to embrace new digital tools to drive customers to their store, and franchisors need to provide tools that are easy to use. Every store is different, what may work in one area may not work in another, but every store needs access to the best possible tools to help them experiment and see what combination works for them.

“There are hundreds of conversations about businesses occurring on websites such as Facebook, Instagram and Foursquare, and franchisees and marketing departments are often faced with the dilemma of not knowing where to start. Is it the role of  head office to manage the social media presence of a business or is it the individual store’s prerogative to own their digital footprint? Either way, the franchise needs the right tools to manage digital and think about brand compliance issues that may emerge,” says Tanner.

It is an exciting time for franchising and the fast-paced evolution of local marketing will increasingly add pressure to the franchisorfranchisee relationship. Head office will increasingly need to demonstrate value by providing tools and technology to enable local sites, whilst retaining ultimate control for the good of the brand.

Paola Tanner is the sole director at Fuse, Australia’s leading multi-location specialist agency focusing on marketing implementation.

Fuse has developed a best of breed marketing portal to help multi-site businesses implement national and local marketing campaigns. Providing a centralised marketing platform creates huge efficiencies in retail marketing operation and provides  best practice campaign execution for franchise chains at local and national level.

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