Shifting to a Higher Gear: Together, franchisors and franchisees can prosper through mproved alignment to build a stronger national marketing fund.

Author:Beaupre, Louie

The relationship between franchisors and franchisees can be challenging, characterized by a "give and take" mentality, especially in regards to national marketing funds. Franchisors often want franchisees to give more dollars to national marketing funds, but franchisees believe franchisors already take too much.

However, when specific strategies are implemented, this challenge can be mitigated, and both parties are likely to agree that investments into a national marketing fund are appropriate and even desired. The basic framework for gaining franchisee support of a shared marketing fund includes objective and goal setting, complete information sharing, clear performance metrics and reporting, and analysis of competing marketing strategy alternatives.


To create a high-performing partnership between franchisors and franchisees, there needs to be a shared consensus about the national marketing fund purpose. Without this agreement, it will be nearly impossible to manage the fund, execute marketing initiatives, and maintain an effective investment level.

The franchisor must help its franchisees understand that leveraging economies of scale is a primary benefit of franchising. In fact, it's one of the best business-building opportunities available to a franchise system. Franchisors should carefuIly explain that missing any opportunity to capitalize on the natural economies of scale that are inherent within a national marketing fund is tantamount to negligence by everyone involved.


When a franchise establishes a shared national marketing fund, creating a culture of partnership with franchisees is critical. With that in mind, the next step toward creating a successful fund is to share the information that all parties will need. This seemingly simple step is necessary, though often skipped. Information sharing allows both parties to come to the same business conclusions about the creation, management, funding, and execution of the national marketing fund.

When a franchise dedicates itself to full, transparent sharing of information with franchisees, everyone prospers from this shared understanding and cooperation. What type of information should be shared? Total dollar amounts being contributed, marketing investments, detailed performance of investments, description and quantification of fund expenses, and articulation of the fund efficiencies and opportunities.


If a franchise...

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