One of the biggest business sectors in Australia is the franchising industry.
According to IBISWorld statistics, there are about 1170 franchises in Australia, which generate $172 billion in annual revenue and employ about 570,000 people. That’s a substantial segment of the Australian economy.
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Franchising reaches across many different industries and sectors, including areas as diverse as food, fashion, and services for business and the home. This diversity means franchising has a direct and indirect influence on many parts of the economy.
While there have been some highly publicised franchising collapses over the past few years (Pie Face immediately springs to mind), the majority of franchise businesses continue to operate profitably for both franchisors and franchisees, who are the people at the coalface of these operations.
As with any other part of the business world, franchising has had to respond to the demands of a digital economy. In doing this, franchisors and franchisees have had their own specific challenges to overcome, some of which derive from the unique structuring of franchise businesses. This extends to the way marketing, including digital marketing such as social media, is handled.
A franchise operation differs greatly from the standard corporate structure because the people who have many of the responsibilities and tasks usually assigned to “employees” are, in fact, those who have bought into the business to become part-owners, or “franchisees”. Hard-working Australians, many of them mums and dads, have often put sums of up to a few hundred thousand dollars into becoming franchisees. This means they have a very serious financial investment and emotional stake in their franchise.
Of course, because of this investment, the questions that arise in regard to how the franchise is promoted through marketing and advertising can often create plenty of stress and conflict between franchisees and the franchise head office, as SmartCompany franchising blogger Jason Gehrke points out.
“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 (i.e. sales) may be different from the marketing objectives of franchisors (e.g. brand awareness),” Gehrke says.
“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.”
In some regards the emergence of social media has possibly created an even bigger divide between the objectives of franchisees and franchisors.
This is because the traditional gatekeeper roles of head office marketing and advertising officers have, to a degree, been diminished. Or at least that’s the perception, as small business owners either dip their toes or dive wholeheartedly into the new world of Twitter, Facebook, LinkedIn, Pinterest and Instagram.
Some small business owners have taken to social media with aplomb, others have muddled through, while many continue to drag their feet.
This is just as true for franchisees. But here is where it gets tricky. While small business owners are generally beholden to no one else’s brilliance or stupidity but their own, franchisees sign up and expect to receive guidance and support from head office on marketing matters in areas such as social media.
That guidance and support may not always fit with how they, as a franchisee, see their business or the brand. And how an individual franchisee sees their business and the brand may not always align with the head office view.
This potential grey area in how brand is perceived and communicated at each end can create very real problems in maintaining brand consistency and even reputation for the franchise.
Gehrke highlights a very important aspect in this franchise relationship and that is that the operational experience of franchisees puts them at customer level almost every single day – like other small business owners, good franchisees know their customers inside out, and they have the local knowledge which can turn a business from being just another shop on High Street into being part of the community.
Social media has become a key battleground for all businesses in this regard. The franchisee who is active and engaged in a positive way with their customers and the local community through mediums such as Facebook is developing brand recognition, visibility and trust.
However, the flipside of this is the franchisee who might be active and engaged on social media but in a negative or haphazard manner, which could be damaging the overall brand reputation of the franchise. An errant Facebook post by one franchisee can reflect badly and do all sorts of damage to other franchisees across the country.
There are five key things that franchisees and franchisors need to be across if they are serious about making social media work for their franchise:
- The franchise agreement between franchisees and the franchisor needs to detail by whom and how marketing strategies and executions, including social media, are to be discharged. This is the basic bedrock agreement for all marketing activities.
- The adaptability and responsiveness of franchisees should be used to drive the social media strategy of a franchise. Franchisees should be viewed as brand advocates who can drive marketing messages deep into their franchise territories, creating positive brand recognition and reputation across the franchise network.
- The central office marketing strategy should provide a framework and roadmap for content creation and execution for franchisees. Letting go of the reins entirely and leaving franchisees to their own devices is not the answer; franchise head office needs to be supporting franchisees with ideas and material that gives franchisees the licence to develop and grow their businesses.
- Data from social media marketing is valuable and should be shared across the franchise network to improve the quality of strategies, execution and results for all franchisees. This sort of data can also reveal local and regional variations in the success of strategies and executions.
- The importance of training is paramount for ensuring all franchisees are conversant and confident with using social media. Areas that especially need to be covered are legal requirements (we’re all publishers now, after all) as well as the practical skills required for administration of social media accounts. If head office doesn’t think it can do the job in this regard, there are some very good digital marketing agencies who are able to step in and provide the training.
Fi Bendall is CEO of The Bendalls Group, a business that leads STRATEGY : ADVOCACY : MOBILE delivering the business acumen to drive effective positive results in a disruptive economy for the C-suite. Fi has recently won a Westpac/AFR 2015 100 Women of Influence award. See more at: http://www.bendalls.com.au/