Franchising

Is franchise marketing management a poisoned chalice?

Jason Gehrke /

The old saying, ‘success has many fathers, but failure is an orphan’ often sums up the role of marketing manager of a franchise chain.

Marketing managers will be among many to take the credit if a marketing campaign is a success, but often stand alone in the crosshairs if a campaign fails.

The marketing manager’s role is a lightning rod that draws equal amounts of praise and criticism, often from the same stakeholders depending on which occasion they are asked.

The primary stakeholders are franchisees. Marketing managers who have come through the ranks of a franchise group will understand the primacy of franchisees as stakeholders in any marketing campaign.

Marketers who are new to franchising don’t fully appreciated the importance of franchisees as stakeholders until they have been button-holed by one at a conference about how such-and-such an ad sucked, or how such-and-such a campaign was poorly conceived and executed.

This can be a disconcerting lesson for a marketer new to franchising (and thoroughly entertaining to watch for a casual observer).

There is often a love-hate relationship between franchisees and marketing managers. When sales are going well, every day is Valentine’s Day. When sales are poor, accusations fly thick and fast.

So why is this role – potentially more so than any other in a franchisor’s organisation – so fraught with polarised emotions?

Put simply, it’s because everyone involved feel that they are a marketing expert.

Marketing managers in this day and age mostly have tertiary qualifications, and have some prior experience working in organisations large enough to have a marketing department with staff other than themselves. Quite rightly, they are entitled to feel qualified to do their jobs.

However, their prior experience is usually in a much bigger organisation (with a correspondingly much bigger marketing budget), so there is often difficulty adapting to the culture of a franchise organisation which has a much flatter management structure, and where the budget is comprised of the contributions made by franchisees.

The Franchising Code of Conduct recognises that conflict may occur between franchisees and franchisors over contributions to marketing funds, which is why there is a requirement to have the funds audited unless more than 75% of franchisees agree that no audit is required.

While an audit will identify where marketing funds have been spent, an audit won’t identify if such spending delivered the best possible marketing outcomes for the organisation, and this will lead to creative tension between franchisees and marketing managers.

As small business owners, franchisees want all marketing activities to result in sales (and lots of them). Marketing managers strive to achieve this, but can’t guarantee results. And sometimes the marketing objectives of franchisees (ie. sales) may be different from the marketing objectives of franchisors (eg. brand awareness).

Be that as it may, the bottom line is that if franchisees are contributing to the cost of marketing, they want to have a say in how that money is spent, and will have an opinion accordingly. This, and their operational experience in the business, is what makes franchisees marketing experts.

It should also be noted that franchisees are generally required to contribute to a marketing fund irrespective of whether or not they are profitable. If a franchisee is doing it tough in their business, their expectations of marketing outcomes are greater, and their opinions are more forcefully aired.

Another reason for tension between franchisees and marketing managers is that franchisees have generally staked everything they own on the success of their businesses. They’ve mortgaged their homes and risked their futures (and those of their children as well) on a business that they hope will lead to better things in the long run, and therefore expect that good marketing will help create that future. If the business doesn’t work out, a franchisee could lose everything.

In contrast, the consequences of failure are much less severe for a marketing manager. They can often just move on to another job somewhere else if their role in franchise marketing doesn’t work out.

This can also be a source of frustration for franchisees who are in it for the long haul, and on average, operate their franchise businesses for seven years according to Franchising Australia survey data.

Marketing is an occupation where there is high job portability, meaning that turnover can be high and tenure can be low. It can be very frustrating for franchisees to deal with a procession of different marketing managers every couple of years, especially when new marketers seem to want to make changes to strategy or execution for changes’ sake. (The words ‘brand refresh’ send a shiver down the spine of most franchisees because it automatically leads to an assumption of major capital outlays.)

Yet despite the potential for conflict between franchisees and marketing managers over who knows best, the relationship works most effectively when both parties understand each other’s point of view.

For marketing managers, getting out of national office and spending time in the field with franchisees and developing an operational understanding of their businesses is key. For franchisees, this means engaging with the marketing manager in a constructive and proactive manner, not a reactive one.

Franchise marketing managers who excel in their role are equally passionate about their custodianship of the brand as they are about the success of the franchisees who share that custodianship with them.

When passion and people come together for a common cause, great things can be achieved.

For an insight into how to align marketing and franchisee expectations, as well as case studies of outstanding campaigns presented by the marketing managers of McDonald’s and other high-profile franchise brands, the Franchise Advisory Centre is partnering with Griffith University to hold its annual Franchise Marketing Forum in Brisbane on November 20.

Jason Gehrke is the director of the Franchise Advisory Centreand has been involved in franchising for 20 years at franchisee, franchisor and advisor level. He advises both potential and existing franchisors and franchisees, and conducts franchise education programs throughout Australia, and publishes Franchise News & Events, a fortnightly email news bulletin on franchising issues and trends.

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Jason Gehrke

Jason Gehrke is the director of the Franchise Advisory Centre and has been involved in franchising for 20 years at franchisee, franchisor and advisor level.

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