Franchising

Course Description: The course introduces franchising as a method of retail business in which the
investor/franchisee makes an investment in the form of a franchise fee in exchange for the right to
promote goods, services, and/or processes directly to the public. A franchise usually has a
recognizable name or trademark. Franchising involves the integration of independent companies at
different levels and in different areas of production and distribution. This integration permits more
effective sales and advertising.

Topic5: Franchise Marketing: Creating a Unique Message

Learning objectives

 Define and understand Franchise Marketing

 Understand the importance of brand recognition
 Understand guideline for building and effective franchisor’s brand
 Understand the importance of branding in franchising
 Understand why franchisor and franchisee needs to build a strong communication with each
other
 Determine the present value of a franchise
 Determine and understand how a franchisor should deliver its message to the franchisee and
consumer
 Understand the use of internet in helping franchisors expand their franchise exposure

What is Franchise Marketing?

Franchise marketing focuses on marketing campaigns and franchisors and franchisees use techniques
to draw new consumers or clients to raise awareness of their franchise company and boost sales. The
franchisor must establish a solid, iconic and competitive brand with a business model that can be
replicated by the franchisees1.

Please watch the video: https://www.youtube.com/watch?v=INQyQaT0tyE

Goals of Franchise Digital Marketing2

 Establish strong brand

 Select a wide range of customer network
 Sustain and expand the customer base

Note: The franchisor can manage and do national marketing or guide franchisees to prepare their own
local marketing plan.

Brand Recognition
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https://www.digitallogic.co/
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https://www.digitallogic.co/
The term brand recognition refers to the ability of the customer to recognize and distinguish a brand
from its competitors. In order for franchisors to have a recognizable brand they need to create catchy
logos, colors, slogans, packaging and jingles in order to catch their attention and make an impression.

Stages of Brand Recognition3

 Brand Rejection- When consumers associate the brand with something unpleasant, they are
not going to buy products and services and will greatly affect your brand image. Companies
must protect their brand maintain their reputation to attract potential franchisees.

 Brand Non-recognition- Consumers do not recognize your brand. Franchisor’s should create a
brand that is distinguishable from the competitors, something that contains a unique logo,
symbol, jingle and words as well as its own competitive advantage to make it stand out from
its competitors.

 Brand Recognition- Your brand is recognizable and is distinct from its competitors

 Brand Preference- This stage is where the customers choose among 2 or more brands. Will the
consumers choose you over the others?. Franchisors must make attractive and profitable
offers, create a positive impression and reputation to be chosen by franchisees.

 Brand Loyalty- This is the stage wherein customers will make repeated purchase and patronize
your brand over the others.

Franchisor Brand Guidelines4 How to Achieve Brand Consistency in Your Franchise | Lucidpress

 Brand Overview- Remember that we are creating our own brand to develop an in depth
relationship with our consumers. This includes: Brand identity, mission, vision, company
history and core values.

 Mission Statement- This pertains to the reason why the company exists. This reminds and
inspires them to work under the same brand objective.

 Quality Control- Franchisor guidelines should include quality control policies to maintain the
consistency of the products and services.

 Operations- A good operations plan and operations manual keeps the franchise system intact
and can reduce the cost incurred by the franchisor and the franchisee.

 Appearance- Refers to the logo, color, font and symbols associated to the brand.

In order for franchisors to build a successful brand they must educate their franchisees about the
brand and anything that is associated with the brand such as:

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http://www.oneworldsocialmedia.com/
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  Aesthetics- pertains to staff uniform that they are wearing, wall paint associated to the brand
and consistency of the business concept.

 Product-consistency and quality of your product and service offerings. It should adhere to
standards set by the franchisors and must satisfy the needs and wants of the customer.

 Experience- People do not only buy products and services they also buy the experience
associated in buying those things. Experience is everything. A bad experience can generate a
bad feedback.

 Marketing- Franchisors should have a concrete marketing plan and should be consistent in
promoting their products and services. They should also determine which kind of marketing
campaigns and techniques will be effective in promoting the franchise.

Building strong communication between franchisor and franchisee 5

 Establish standards and expectations
 Demonstrate its importance
 You should communicate regularly

Determining the Present value of a Franchise

According to Siebert (2016) the present value of a franchise can be determined by the following:

 When determining how much to invest on advertising

 When making decisions on which candidates to employ
 When determining whether to use a recruitment agency or not
 When determining what consultant to hire
 When determining whether to maintain brokers
 When determining on the quality of marketing resources

Siebert (2016) stated that upon selling a franchise a franchisor can assume that he/she will be gaining
profits from royalties, advertising fund contributions, technology fund contributions, product sales
and other fees. These fees are beneficial to the future of the company.

The Message

Conveying a message to franchisees and potential franchisees is very important in order to sell a
franchise. Companies should know and understand the nature of their franchise, their objective, what
they are selling and who your potential franchisee (Siebert 2016).

Watch the video: https://www.youtube.com/watch?v=tvLi_kZ_w0Y

The buyers that you have to cater

Developing a marketing message is crucial to the success of a franchise because it can influence the
buyer in purchasing the franchise. At the same time creating a message is important because people
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will read and see it and this will have an impact on them. According to Siebert (2016) buyers are
influenced by the following:

 Evaluation of the franchise documents

 Lender that will provide the funds for the business
 Personal Accountant that could give her good advice
 Trusted friends and relatives
 Search engines and the messages conveyed by the franchisors

Message conveyed by your materials

In order to connect with your consumers and potential franchisees a franchisor should create a
message that is concise, easy to understand and would give the consumers and franchisee an idea
about the nature of the business and its objectives.

Your message should convey the following:

 Your message should clearly state your product or service offerings

 Your message should create an emotional impact with your audience

Please watch the video: https://www.youtube.com/watch?v=gIBk2k9rvXM

Motives of your Franchisee

Franchisees like to buy a franchise because of the following reasons:

 Independence
 Be the boss
 Flexibility
 Have a control on their own future

Make your own story

Remember people don’t just buy products and services they also buy the stories behind it. This allows
companies to establish a deeper connection with their customers. Siebert (2016) explained that firms
needs to differentiate themselves from competitors because each rival claimed that they have the
best concept, number 1 in the industry and so on and so forth.

Please watch the video:

https://www.youtube.com/watch?v=yX_mukHf_ik

Be Good at something

Siebert (2016) stated that establishing a good brand position is hard but companies should establish
their own competitive advantage in order for consumers to recognize them. Below are the 5 key
essential areas that you need to know in order to win the competition:

 Biggest- offering a wide variety of products

 Cheapest- offering cheapest products
 Easiest- ease of use and good service
  Quickest- giving faster service to consumers
 Hottest- trendiest products

Franchising and the Competition

To begin with, Franchisors should know the market composition and identify the existing competitors
and the potential competitors.

According to International Franchise Association franchisors need to exert effort in doing market
research and should be aware of the following key factors below:

 What are the competition and the competitor doing?

Franchisor’s should be aware of the trends, should study competitor action and anticipate the
future of the business.
 What are the wants of the customer?

Getting customer feedback is crucial to the improvement of the business. We need to

communicate with our customers in order for us determine what they want and to help
franchisors improve their products and services.

 What modern technology is available in the market to make the job easier?

Since we are living in the digital area it is crucial to adapt the changes brought by the digital
generation. Franchisors must learn how to utilize and maximize the use of the internet and
other technology to make the job easier for them.

 Who will help you?

Screening and selecting franchisees is a vital part of franchise growth. We need to select our
franchisees carefully because they are going to help us expand our business. Aside from the
franchisees, we need to choose our team, identify the right people and the right job or
position for them. Motivate them to work and give rewards and recognitions for performing
their job well.

 Did you formulate a competitor plan?

Franchise systems should conduct research to know their prime customers, technologies and
action plans. Franchisors should review the details, daily tasks to keep the business updated
and to generate ideas for innovation. Franchisors should encourage employee brainstorming,
attending seminars and webinars to inspire their people to think out of the box.

 Are you aggressive to expand your franchise?

Being aggressive is necessary to expand your market position. Franchisors must take action to
gain a higher number of customers; they need to formulate strategies and tactics to increase
franchise exposure.

Dealing with Risk vs. Return equation

An effective and efficient way to differentiate a brand is by giving franchisees the promise of greater
financial outcomes than the rivals. According to Siebert (2016) there is a risk-incentive equation at
work here: the higher the risk, the greater the incentive the prospective franchisor would require. If
you achieved superior profits while being new in the industry your potential franchisees should know
about this by showing your financial statements.

Developing a Value Proposition

Please watch video: https://www.youtube.com/watch?v=vA6TG4wMcUU

A value proposition represents the value that a business promises to offer to consumers if they select
to buy their product. This statement is used by the organization to explain why a customer should
purchase a product or use a service and can be viewed as a business or a marketing strategy.

According to Siebert (2016) franchisors succeed by offering:

 Affordable and lower initial investment

 Formulating new marketing strategies
 Various target markets
 Broader territories
 Smaller territories
 Franchisees should be provided with superior support services and technology to operate
their business
 Having different fee structures

Delivering the Message

As stated by Siebert (2016) when you have established your message and your value proposition, the
next step is to decide how you want to transmit the message. The message can be delivered by using
different mediums such as: web pages, ads, stories, brochures, videos, social media and other tools.

The Franchise Website

In the digital era, the most important tool to be utilized is the use of your website. The website can
attract potential franchisees. Franchisors either have a great social media story, blog entry and doing
e-mail marketing to gain franchisees (Siebert 2016).

Franchise web development process6

 Prepare a website blueprint

Build a detailed plan that lets you understand your website design and develop your project.

 Website Design
Transform the specifications set out in your website blueprint into a beautifully designed
website and oriented templates.

 Website Development
Turn your website template into a fully working optimized lead generation system.

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  Launch
This refers to showing the world your newest website to start providing high-quality and
profitable leads to your growing franchise.

Increasing Franchise Leads: Boon or Bane

The positive side of using the internet allows franchisors to present their franchise to a larger market.
Siebert (2016) said that a good website enables franchisors to connect through relatively new
technologies, such as online platforms and streaming videos, which significantly reduce their costs.

Though internet has positive impact on promoting franchises, the bad news is that the amount of
leads produced by a good website increases dramatically and the volume of chaff that the franchisor
needs to sort also increases (Siebert 2016).

Enhancing Capture Rates

Siebert (2016) defined Capture Rate as the percentage of individuals accessing a particular page who
send you their contact details. Internet prospects want to obtain data by utilizing the use of clicks and
keystrokes, and not by making a phone call or sending an electronic mail.

Siebert (2016) any franchise website or corporate website should have a simple-to-fill out reference
form for the contact information of the applicant and other pertinent data such as the capital
available, the timetable to make the necessary decision, and the geographic area of interest to your
prospect.

The Franchise Brochure

Even if we are living in the digital era a physical brochure is still a must-have for every organization. As
stated by Siebert (2016) it is use as a reference by secondary purchasers (attorneys, lenders,
accountants, Spouses, and other), these people would not be impressed if a franchisor only has a PDF
flyer and a friendly website.

The Franchise Mini Brochure

According to Siebert (2016), this serves as a mini version of the franchise marketing which can be
given freely to consumers and prospective franchisees. The difference is that franchise brochure and
mini brochure is created for a different purpose. Mini brochure is used to aid lead generation and
expand the market presence. While on the other hand, full franchise brochure is formulated to build
credibility and improve image of the franchise.

Franchise Videos

Please watch the video: https://www.youtube.com/watch?v=whjA0Gw6wuE

Franchise video is vital to educate and entice franchisees and potential franchisees. Siebert (2016)
stated that to make an effective franchise video franchisor must always remember to emphasize the
rationale of each video presentation; it should showcase your credibility and should be delivered to
your audience. Siebert (2016) said that making franchise video can drastically increase your capture
rate and generate higher leads for the company, it is also a less costly way of educating and
connecting with your consumers and franchisees.
Autoresponders, Correspondence and Drip Campaigns

Autoresponders is a simple and effective electronic mail marketing tool that enables you to send your
customers a set of scheduled emails for follow-up; based on particular constraints that you set within
your store7.

Business Dictionary defined Correspondence as any written/digital or electronically generated

communication traded between two or more parties. This can be in the form of letters, emails, text
messages, voicemails, notes or postcards.

Drip Campaign or Drip marketing

Drip marketing refers to a program used to exchange company information through a continuous flow
of marketing communications, including emails, social media updates, postcards, telephone calls,
brochures and printed newsletters8.Such digital tools increase customer awareness of the brand and
create leads for sales teams.

Benefits of Drip Marketing9

 Conscientious audience
 Beneficial in building relationship
 Timing
 Higher chances of generating sales

Assessment : Reaction Paper

Below is an actual documentary of a meeting about franchise marketing. I want you to assess the
meeting based on what you learned in our discussion.

https://www.youtube.com/watch?v=XyUSPKXlay0

The Present Value of a Franchise - Franchise Decisions - Entrepreneur.com

REFERENCES:

SIEBERT (2016) other citations included as footnotes

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https://support.3dcart.com/knowledgebase/
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www.marketing-schools.org
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www.marketing-schools