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As I speak with franchisors, multi-unit decision franchisees and their marketing teams. I am hearing some very common themes from some of the top franchises in the nation and even new and upcoming ones.

If you are reading this and are a franchised company or multi-unit operation, you understand better than anyone the incredible challenges that your business model faces. In addition to keeping up with the competition and staying ahead of the curve, segmented marketing options are making it difficult to properly manage, sustain and protect your brand identity and marketing efforts.

As franchise marketing challenges continue to grow, you need tools that will enable you to get a grip on your brand and maintain its identity while giving your franchisees the freedom to cater to their unique local markets, in a way that represents both you and the franchisee accurately. The trick is finding a tool that is both cost-effective and flexible enough to meet those challenges without compromising the brand you have worked so hard to build.

Here as some common themes I am hearing.

1. Franchised businesses face very specific issues, particularly when it comes to localized content and marketing. Whether franchisees expect that name recognition alone will gain them customers or they have their own special methods of advertising and marketing to their local niche, brand consistency is the most vital component of successful franchise companies. Still, it can be difficult to retain brand consistency when facing the following challenges:

2. Franchisees are typically not marketing-savvy and therefore resort to simply running the business, relying solely on the brand to get them through.

3. Franchisees are ok with supporting the national brand but want it localized, so they take matters into their own hands, using content or marketing tactics that damages or ignores the brand altogether.

4. There is not an end to end marketing system in place to monitor, drive and sustain the brand. In turn the franchisees sometimes get creative to localize promotions or products or services that they offer to cater to the local market. In their mind they are left to fend for themselves as the franchisers expect them to find or customize locally relevant content or marketing promotions.

Based on my experience as a franchise, I also believe.

1. Tools for localized marketing are clunky and difficult to navigate, and often buried in the company CRM. So even when franchisees are willing and able to build communication to speak to the local client base, it becomes cumbersome and intimidating to do so.

2. Most importantly, let's be honest, you would be lucky to get 10% participation across the board from traditional tools incorporated in CRM's. ( There are exceptions)

3. Franchisors are not accessible to franchisees or owners are busy running the business, making communication difficult and putting the Franchise brand at risk. I know I know... there is typically one or two in a typical franchisor marketing team for small and large chains alike. You can only do so much. Sometimes you just need a little help.

4. Franchisees are ok with paying into supporting the national brand but get frustrated that the content does not speak to the local product mix or growth vertical they are capitalizing on. They would like a little input or control. That would make them real happy!

It is also well known that Franchise Marketing tools that collect dust. We have all seen them, 10 year old marketing collateral that was brought in with good intentions but were not utilized properly at the time and fell into the hands of an unsuspecting customer. Sometimes with an old offer or pricing that makes conversations awkward and damages brand and cuts into profitability.

Content Curation Tools as a Solution

One type solution to the many challenges faced by franchisors and savvy business owners in the franchise business today is the use of content curation tools.

Content curation tools gives franchisors an outlet to control the company's brand identity without limiting franchisees in their local content, promotions or other marketing.

Franchisors can push national marketing direction to the franchisees often housed on the company website or blog and share basic marketing materials and content for the franchisees to change out if they feel necessary. This could include products , services, calls to action, promotions, specials etc.

Franchisees can edit or alter certain controlled aspects of the messaging to reflect the brand's presence in their local community, all without compromising the image that the company has worked to create. Given the limited resources most companies have we build and provide the newsletter content for you (with your guidence of course).

So most Directors of Marketing can simply make a few suggestions to edit and then publish to the local franchisees who can then edit from a selected amount of related local content or offers and share via email list or share socially via Twitter , Facebook etc.. It is a simple, inexpensive and all-encompassing way to control your message, give the local franchisees an opportunity to get involved and fine tune content and offers on a local level which at the end of the day, should retain and grow existing business as well as gain new customers.

What else? What other challenges are there? I would love to hear from you or chat about possibilities.

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You decided to become a newly minted franchisor.

And when that day finally arrived how exciting was that?

You were going to conquer the world with your franchise brand.

Here's what you did right.

Started with a tested business model with a verifiable proof of concept.

Hired a competent and experienced franchise attorney to develop your franchise agreement and franchise disclosure document - FDD.

Your franchise attorney strongly suggested (or insisted) since you have a strong proof of concept for your franchise model that you include an Item 19 Financial Performance Representation - FPR and you did it.

Developed an operations manual, training system and support system that is scalable as you grow your franchise system.

You had a reasonable budget to market for franchise recruitment.

But, after a while, you will hate being a franchisor. Here are your 7 biggest beefs.

  1. Early franchisees you selected seemed very passionate about being franchise owner/operators but they are not living up to what they promised and you're more than disappointed.
  2. Multi-unit franchisees are not current with their development objectives and they expect you to not hold them to what everyone agreed to. They want some or all of the following extensions, refunds or credits against franchise fees and in return you get nothing. Not even what you originally bargained for.
  3. You have a great training program and franchisees are shortcutting what your program offers and requires.
  4. Franchisee local market success depends on local store marketing, your franchisees don't make the investment in it. And they complain to you that sales are too low and your brand is not well known enough in their area.
  5. Franchise owners expect you to fix their unit level problems with employees, landlords, suppliers, insurance, local municipality, their business & operating partners. You had no idea that you'd be expected to do so much hand holding and babysitting when you set out selling & opening franchises.
  6. Franchise recruitment for a new franchisor is tough. However you couldn't have imagined how difficult generating and managing leads would be. And the cost per new franchise recruited is far more than you anticipated.
  7. You discovered that your management team had a much greater learning curve for transitioning your business to a franchise development and operations company. And now you're faced with some tough staffing decisions as you move forward.

This is not an exhaustive list of awful franchise things and readers can feel free to add to the list.

Good news is that you had a good underlying business at the outset. And all these franchising challenges can be remedied.

If this sounds llike your franchising story & you want some help solving your problems call me at 443.502.2636 [email protected]. Lease the talents of 20+ year proven franchise executive, who has seen and solved these problems before.

The smartest marketers are able to understand which customer segments are most valuable to their business and how each of those segments prefer to receive communication.

 

 

We've noticed there are 3 primary buckets of engagement: The Overt, The Personal, The Money Talker. 

 

 

  1. The Overt customers are the ones that post on social media, tell their friends where to go and are generally "the loudest".  They want to feel appreciated when they share love for your brand.

  2. The Personal customers are the ones who will communicate with your brand when you reach out to them.  They tend to be the most engaged email subscribers, enroll in loyalty programs, answer surveys and claim promotions.

  3. The Money Talkers let their wallet give all the feedback they need.

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The key to identifying who customers are and what they want is collecting data on them.  You can start collecting data immediately:

  • Send a feedback survey via email to your email subscribers
  • Invite people to try a new menu item
  • Run a promotion for your social media fans only

More data = better segments.

As you collect more customer contact information and additional data on who these people are, you will start to see some trends and consistencies - these will comprise your customer segments.  

It's easy to fall down a rabbit hole and make arbitrary segments so, when you get to creating your segments, it's important to think about the drivers of your business first.

For casual dining businesses, increased online engagement increases the average frequency of visits. You should create segments that help you understand how to engage that segment to do what will drive your business.

Segments for casual dining restaurants that can encouraged to come more frequently might be:

  • Facebook Fan + has spent money in-store before
  • Filled out a survey + on email list
  • Enrolled in loyalty program + social media follower + has been to website in the past month + filled out a survey

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There are nearly unlimited different segments you can create and maintain, the key is starting somewhere and tailoring as you go. Once you create segments, you can send targeted and custom messaging that relates to what that segment cares about. They will appreciate the tailored messaging and you will benefit from them coming and giving you more of their business.

 

Jake Cohen.jpgTo see how Privy can help you create and maintain segments, click here.

 

 

 

Julie Ricchuito.jpgTo see how On The Spot Systems can help you collect in-store surveys and apply them to your segments, click here

 

I frequently get questions related to advertising. So, I began to look more keenly at the advertisements around me. I wanted to find examples of things to do and not to do.

Testimonials and Puffery

I found this advertisement in my local paper. This provides a good specimen for my first two dos and don'ts.

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1. Don't use absolutes. This ad touts that dental implants are: "The BEST Solution for Slipping Uncomfortable Dentures..." I am an attorney not a dentist, but really the BEST (the word 'best' is in all caps in the advertisement).

Aren't there other solutions out there? Is a dental implant really the best solution?

The advertisement goes on to say: "We offer the Best Solution for your Budget (this time the word 'best' is not in all caps; however, you see some random capitalizations that even an attorney would not ascribe). Again is it really the Best for my budget? Doesn't Dr. Jones down the way offer comparable pricing and installment payments?

Don't use absolutes in your advertisements! There is always an expectation. There is always someone else that offers something akin and argumentably equal or better to what you are offering.

2. Do get permission before your print. I don't know about you, but if I were G.L., I would want the good doctor to ask before he printed: "I couldn't wear my lower denture at all. I didn't want to go out in public. Dr..... placed some implants in one operation and gave me immediate temporary teeth. I can eat apples corn on the cob & smile with confidence. It changed my life."

Do get permission before you print testimonials! The speaker would be most thankful and the law requires it.

Print the Facts and Protect Your Rights

I found this advertisement in the August 2012 issue of Popular Science. This provides a good specimen for two more dos and don'ts.

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3. Don't print unless you can point to it. It you are going to make a claim, make sure that there is evidence that you can point at to backup your claim. And, if it is an advertisement for prospective franchisees, make sure you point to something in the FDD or franchise disclosure document.

American Honda Motor Company in its ad for the Accord says that "J.D. Power and Associates has named the Honda Accord 'Highest Ranked Midsize car in Initial Quality.'" At the bottom of the ad in fine print (fine print-we will get to that) it cites an Initial Quality Study conducted by J.D. Power.

Don't print it unless you can point to the facts! If you are going to make a claim, make sure you can point to the facts to backup your claim.

4. Declare your rights. On the very bottom of the advertisement notice you will find the ©2011 American Honda Motor Co., Inc. This stakes American Honda Motor Company's copyright to this advertisement. It says that the advertisement is American Honda Motor Company's original work of art and no one is allowed to copy it. And, yes that is the proper copyright format. The © symbol, the date, your company name.

In this electronic copy and paste world, it is more important than ever to include a copyright notation at the bottom of your advertisement. Oh and while you are at it, include the other symbols: registered trademark®, service mark℠ and trademark™.

Declare your rights! In this electronic copy and paste world, it is more important than ever to include registered trademark®, service mark℠, copyright© and trademark™ symbols in your advertisement.

Be Transparent

I found this tag on a shirt that I recently purchased for myself. It is a good specimen for my last dos and don'ts.

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5. Do skip the fine print. It is all about transparency. Transparency is in. Transparency in pricing, transparency in government is all good. If you include a lot of small fine print at the bottom of your advertisements it looks like an advertisement for Viagra or that that your product comes with a lot of hidden terms and conditions.

Instead of in fine print saying that my newly purchased shirt, after one washing would be faded and discolored, the tag nicely explained to me: "We produced this garment with considerable help from the wearers, printers, & embroiderers whose handwork made this style unusual and exclusive . This hand woven and embroidered fabric may result in slight weaving and shade variations, thereby giving it a unique character all its own. Enjoy!

Do skip the fine print! There is a way to say everything. Say it without the traditional fine print legalese. Make everything you say a selling point.

Legal Disclaimer: All advertisements are used under the fair use exception of copyright laws. I have not been a recipient of dental implants, me nor anyone in my household owns a Honda, and no animals, to my knowledge, were harmed in the making of my shirt.

The broker, the landlord and even the franchisor will have an interest in the lease signing that is not always perfectly aligned with the business owner who will be making a long term commitment.

The business owner is most likely personally guaranteeing a large portion of that commitment, for hundreds of thousands of dollars over the course of many years.  He or she is truly committed to the success of the location.

Location, location, location is the mantra of success in retail. It is prudent after you finally select a location, negotiate the rent and are ready to sign a lease that you don't let the fine print kill your location down the road. I have worked with hundreds of franchisees and landlords over the years, and I know what to look for,what is critically important and most importantly what many landlords will give up.

As a retail business, your lease is one of your most important assets.

Every situation and location is unique and every business has a different story to tell. Leases can be complex, long and one sided contracts.

My role as your attorney is to explain every clause in the lease in plain language and to come up with a plan to negotiate the most tenant friendly language in the final version as possible.

Here are 10 important clauses to negotiate, after the rent has been decided.

1. CAM (Common Area Maintenance): How will the landlord calculate their cost to maintain the property?

2. Personal Guarantee: What if things go bad?

3. Term: What if things go great?

4. Build Out Period: Never underestimate the time it takes to build a store.

5. Assignment: If you sell, will you still be liable? Can you sell?

6. Use & Exclusivity: Can you do what you want? Can others compete directly?

7. Signage: You don't get what you don't ask for.

8. Permits: How long will you have?

9. Default: How much time do you get to cure?

10. Remedies: How draconian are the landlords's remedies?

Expect the process of negotiating a lease typically to take between 10 and 12 hours of legal work for review, drafting comments and negotiating the final version. The first step is a thorough review of the landlord's lease marking up our requested changes. This first step is critical; it is very difficult to get any further changes not asked for in the first round. After the attorney and the client agree on that first round it is presented to the landlord.

Usually, a conference call is scheduled to come to terms with what is agreeable and to identify all the remaining outstanding
issues.

Finally, the last steps are to negotiate the remaining issues and to work with the landlord's attorney to prepare a signature ready final version. You can expect the process to take 3 to 5 weeks after receipt of the initial lease from the landlord. But the time and money are well worth securing the advantage and protection of your great new location.

When putting together a marketing plan for a franchise client, the question inevitably comes up: What branding materials should be included in the franchise ad kit?

Well, before you can even begin to determine what the pieces and parts should be, first and foremost a franchisor must provide a strong, consistent brand with documented brand standards.

One of the reasons entrepreneurs buy in to a franchise system is to gain the benefit of a brand and the immediate recognition that name provides on their storefront, building or van. If the brand does not have a well-articulated foundation of how it should look, speak and act, the consistency and value of that brand can be quickly diminished.

Once your standards are established, think about the type of business you have and what materials will help communicate your message to customers. For some it may be yard signs and window decals, for others it may be van wraps and door hangers.

But whatever the magic combination for your business, the materials must be flexible enough to allow appropriate customization for the individual units. This customization may be the format to accommodate different facility restrictions, or the message to respond to competitive issues.

So, when developing your franchise marketing materials, keep these key things in mind:

Have you established and documented how your brand looks, speaks and acts--and does everyone in the organization understand these foundational elements of the brand?

What materials will be most appropriate to communicate to customers in your business format and environment?

Where does your customer get their information from (specific media, online, social, on-premise) and what are the branded marketing materials that your franchisees could use to attract more sales through these channels?

Have you developed materials that are consistent, yet flexible enough to accommodate local marketing needs?

Just as no two franchises are exactly alike in their format, product, and offer, every franchise ad kit will be determined by the special needs of the system. The only thing that will always be constant is the need to start with a well-defined brand.

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