Successful franchise advertising is a two-way street. Franchisors create marketing standards that guide advertising efforts for your multi-location franchise business. Meanwhile, franchisees implement campaigns while following the marketing standards to ensure brand consistency.
However, implementing franchise advertising is more complicated than just meeting brand standards. You have to consider regional and local differences between your audiences. Plus, franchises have ad budgets, approvals, and reimbursement requirements.
This guide walks you through everything you need to know about franchise advertising–from franchise advertising fees to real-life marketing examples.
What Is Franchise Advertising?
Advertising for a franchise looks a little different than advertising for an online store or a small business with one location. In this guide, we’ll talk about franchisors, franchisees, and franchises.
- A franchisor is a business (or business owner) that authorizes other individuals to operate under its name and sell its products or services.
- A franchisee is a business owner with the license to sell a franchisor’s products or services and operate under the franchisor’s brand name.
- A franchise is a joint business venture between a franchisee and a franchisor.
If you’re reading this, you likely already know what these mean, but it’s important to outline the role each of these plays when it comes to advertising.
Franchise advertising is the marketing strategy a franchisor and franchisee use to increase brand awareness or drive sales. In some cases, the franchisor and franchisee collaborate to create a cohesive advertising strategy that resonates with the main brand and local audience in different locations.
In this franchise advertising guide, we’ll cover:
- What Are the Benefits of Franchise Advertising?
- Franchise Advertising Examples
- Franchise Advertising Fees
- Which Franchise Marketing Channels Have the Best ROI?
- How to Calculate ROI for Franchise Marketing
What Are the Benefits of Franchise Advertising?
Franchise advertising has many benefits, including:
Lower advertising costs
Franchises usually have advertising support either in the form of funds or resources. Unlike solo small business owners, franchises have multiple locations that are in the same region. This makes it easier to partner on advertising with other local franchisees.
A common way that franchises partner is by contributing a portion of their ad budgets to a regional advertising campaign. For instance, several auto dealerships that sell Toyota vehicles might decide to pool their ad funds together. With a higher overall advertising budget, you can increase visibility at a lower cost. As you increase your ad spend, you could outbid other competitors and win more customers as a result.
Another way that franchisees get lower advertising costs is if their franchise has an advertising fund. Each franchise is allocated an amount of money for advertising each month or year. Since many franchise agreements require franchisees to contribute a percentage of sales toward advertising, you’ll want to use your advertising budget.
Better ad targeting
Most online franchise advertising techniques leverage Artificial Intelligence (AI), user behavior, and location data to present your ads to the right people. That means you won’t spend money targeting people that are just browsing. Instead, you reach prospects that are looking for your products or services. As a result, you avoid spending on marketing campaigns that are less likely to bring the results you desire.
Franchise Advertising Examples
Franchise advertising isn’t a new thing. Neither is it a theory because real-life multi-location brands are using it to boost sales in their local businesses. The following are examples of franchise marketing in action in the real world.
1. McDonald’s Celebrity Meals
In the last few years, McDonald’s has been ramping up its partnerships with celebrities to offer “celebrity meals”. As the name suggests, these are what celebrities say is their go-to order from McDonald’s.
By partnering with celebrities that have large fan bases, McDonald’s has driven millions of app downloads. People have to download the McDonald’s mobile app to order and get discounts through the loyalty program. For instance, with the app, some of the meal items may be included for free, whereas, you’d have to pay full price without it.
It has been a huge success for the fast-food restaurant. For instance, the collaboration with Travis Scott was purchased so much that it began a trend on TikTok and led to a shortage of Quarter Pounders (Scott’s main order item). Reportedly, the rapper earned $20 million from the deal, so it was highly profitable for the fast-food chain.
Since then, McDonald’s has been promoting other celebrity meals, and more brands are following in their footsteps. Here are a few more examples of celebrity meals from McDonald’s that drove restaurant sales.
- BTS meal – 10-piece McNuggets, a medium coke, and fries with special Sweet Chili or Cajun sauces.
- Saweetie meal – 4-piece McNuggets, a Big Mac, medium fries, Sprite, and “Saweetie and Sour” and Tangy BBQ sauces for dipping.
On top of driving in-store traffic, the collaborations have also driven profits through merchandising.
2. 7-Eleven’s “Take it to Eleven” Campaign
The local convenience store chain 7-Eleven is a franchise that has been around for decades. However, in the last few years, 7-Eleven has added 24/7 delivery services. Many people don’t realize that they can get products from 7-Eleven delivered, so to build awareness 7-Eleven has been exploring different franchise advertising tactics.
For example, they launched the “Take it to Eleven” campaign with YouTube and television ads. A fun fact is that the company recorded the ads in front of real 7-Eleven franchise locations.
To measure the effectiveness of its franchise advertising, 7-Eleven looked at the correlation between when people visited a store and when ads appeared on television.
3. Panera’s Loyalty Program
The quick-service restaurant Panera uses an email subscription program to drive in-store franchise sales. To use the loyalty program, called Panera’s Unlimited Sip Club, customers go to the Panera website and sign up with their email. Unlike other loyalty programs, there is a subscription cost per month. Users pay $10.99 per month and get unlimited coffee, tea, and lemonade. They also receive refills on select drinks. To use the subscription end store customers can also download the Panera app. There are numerous benefits for Panera and its franchisees. It creates a recurring subscription revenue and increases the number of return customers, in-store traffic, and mobile app downloads.
The franchise marketing tactic brought about 100,000 potential customers in just a month to Panera locations across the country. According to franchise owners, Panera’s loyalty program generated three times more customers than usual.
Franchise Advertising Fees
A common question that comes up in franchise marketing is who pays for advertising and promotions in a franchise?
The answer depends on the franchise and its franchise agreement. For example, 7-Eleven pays for any advertising for the brand but not individual stores. Franchisees have to pay a percentage of their gross profits to 7-Eleven for advertising. There is a national advertising fee and a fee for local ad expenses. You can view a full franchise agreement example for 7-Eleven here.
This is common practice among many franchises. Franchisors often charge franchisees annual fees for corporate marketing expenditures. Franchise advertising fees are usually additional fees to the royalty charges. However, not every franchisor charges an advertising fee. But for those that do, the advertising charges can be fixed or ongoing. The percent that you pay may also change depending on how many stores you run and much profit you generate.
Which Franchise Marketing Channels Have the Best Return on Investment?
There are several franchise marketing channels like social media platforms and email marketing. This section will walk you through franchise marketing channels with the best return on investment (ROI). But first, let’s look into how to calculate ROI.
How to Calculate ROI for Franchise Marketing
Return on investment (ROI) estimates your investment’s profitability. You can use it to measure how successful your franchise marketing campaigns are and pause campaigns that are not generating revenue. With that in mind, you can calculate ROI based on sales or revenue.
For instance, you can take the sales increase and decrease the total marketing costs (including ad spend and consultation or employee fees). This is called the net return. To calculate ROI, you divide the net return by the total marketing costs. ROI formula looks like:
- ROI= (Final Value of Investment – Initial Value of Investment) / Cost of Investment X 100%
- ROI= Net Return / Cost of Franchise Marketing X 100%
Assume you spend $1000 on franchise marketing and get $1500 as total revenue from the campaign. The ROI for your campaign will be as follows:
- ROI= $1500 – $1000 / $1000 X 100% = 50%
Calculating ROI for franchises is possible, but there are some considerations like tracking which digital marketing campaigns led to in-store conversions. The key is to have advanced tracking and solid online to offline attribution in place.
So, which marketing channels should you focus on for better ROI? The following are franchise marketing channels with the best return on investment.
1. Pay-Per-Click (PPC) Marketing Channels
Pay-per-click is an advertising model that allows you to place ads on social media platforms, search engines, and third-party websites. You pay for every click on the ad.
According to Google’s research, for every $1 you spend on Google ads (including PPC marketing), you receive $8. That means you can get eight times the profit for your spend on pay-per-click ads. That’s assuming they are set up properly.
Here are the best practices for PPC marketing to leverage this powerful franchise advertising technique for your business.
Target your audience by location
One of the best ways to streamline your PPC campaigns is to focus your ads on a particular area. That way, you target people that are more likely to buy from your specific business location. Most pay-per-click platforms like Google Ads, Facebook, and Instagram have options to pinpoint ads based on:
Optimize your ads for mobile
The number of people using mobile continues to grow. For example, use the right ad extensions that suit mobile devices. Ad extensions like those on Google ads allow you to include extra business information in your ads like:
- Phone number
- Business address
- Links to your website
This additional information makes your PPC ads more prominent and appealing to potential customers on mobile devices.
2. Email Marketing
You can use email marketing to generate, nurture, and convert leads into customers. It’s one of the most powerful franchise marketing techniques that increase revenue considerably.
According to marketing research, you can get $36 for every dollar you spend on email marketing. Some of the best practices in email marketing that drives positive results include:
Don’t buy contact lists
Successful email marketing is permission-based. Purchasing email addresses means you will contact potential customers without their permission, which drives failure in your campaign. After all, email campaigns rely on open rates to be successful, meaning that buying a contact list reduces the chances of people opening your promotional email.
Personalize your emails
Personalize the greeting of your emails using your contact’s names. Referring to your audience by their names grabs their attention, which increases your open and click-through rates. Many email advertising tools allow you to personalize your emails with the receiver’s name.
Combine email with other marketing channels
For example, take Panera’s Sip Club. It uses email marketing with a mobile app to drive in-store customers. Panera is thinking about the full funnel for its customers. Since franchises operate in online and offline spaces, this is key to successful franchise marketing.
3. Local SEO Marketing
Local search engine optimization (SEO) is powerful for a multi-location business because 46% of Google searches are local. One of the best SEO tactics for franchises is to add location pages to your website. You should have one local page for every of your business location. In addition to your promotional content, each location page should have:
- Your local business address
- Your business phone number and name
- Store hours and descriptions
Leverage high-volume local keywords in the title, subheadings, and content to drive local traffic to your service or product pages.
Franchises have a lot of opportunities to connect with customers and drive sales, but it’s a lot to manage on your own. When looking for a marketing professional, it’s important to choose a franchise marketing expert. At Goodway Group, we have what it takes to streamline franchise marketing in your business— robust technology, skills, and long experience in the industry. Contact us today to take your business to the next level with franchise advertising.