The definition of a franchise, franchisee and franchisor make the whole premise seem simple.
Franchise: permission given to distribute goods or services under a trademark, service mark or trade name.
Franchisee: the holder of a franchise or a person who is granted a franchise.
Franchisor: a company or person that grants the use of a franchise.
Any brand or marketing manager working within a franchise will tell you it is the very opposite of simple and takes incredible finesse and management to ensure the balance between brand and ease for franchisees.
The franchise market in Australia
The franchise market in Australia is now $181.8b and is growing at about 1.2% a year. IBISWorld reports the franchise sector employs 594,500 people and there are 1314 brands for potential franchisees to choose. There are three times more franchise outlets per capita in Australia than the US, with more than 90% of these starting in Australia.
The Franchising Australia 2016 report by Griffith University advises the total start-up cost for a new retail franchise is around $287,500. Of course, the cost varies dramatically from $5,000 to $1.5million dependent on premises, fit out, upfront costs and legal etc.
The franchise brand as differentiator
In such a crowded market the franchise brand needs to work as a differentiator at two levels.
The brand needs to provide recognition and delineation for potential franchisees in the franchise sector to make the path to purchase easier, for more franchisees.
The brand also needs to work as a differentiator in the crowded business sector the franchise operates in, to make more sales to more people, thus increasing both the direct sales to the franchisee and feeding into the value of the brand for potential franchisees.
It is this very brand, brand system and franchise system that franchisees buy into because it de-risks starting a new business. They see value in an established system and an established brand and will pay significantly more than the average small business start-up costs to access these. The ease of existing marketing systems and a robust LAM template and previous results make it easier for people without prior business expertise to work towards success.
What everyone wants
As the franchisor, your priority is to build and maintain a strong brand to increase your brand equity and the goodwill for your P&L.
As a franchisee, I want a brand that is easy to use when I need to produce sales and marketing collateral. I need fast turnaround delivered for low or no cost, outside the centrally produced campaigns.
This is where the tension arises, and the need for balance between brand and ease for franchisors is paramount.
Negotiating the balance
Once the franchisee has purchased the franchise, it can often seem like the very thing they bought into (the brand) is the very thing they start dismantling.
This perspective, however, doesn't take into account the franchisee's desire to deliver an ROI as quickly as possible on their investment and to grow their revenue. They want to push campaigns into market quickly and take advantage of advertising opportunities that present in their local market. This often means short turnaround times and perceived low-value activity for a central marketing team focused on delivering large-scale, nationwide campaigns.
As the franchisor, you will have invested detailed brand guidelines designed for use by professional designers in specialist graphic design programs. These don't scale into the world of each franchisee (essentially a small business) who won't have graphic design resources available and who won't want to spend extra money with a freelance design on top of their adfund contributions to comply with the brand guidelines. It is from this situation Microsoft Office-generated documents are created, or a 'design without the designer' tool like Canva is used.
Both solutions have a place, but to the brand custodian of a franchisor, these programs don't apply the brand correctly and therefore degrade the brand integrity and diminish the brand equity.
The scale of branded materials in a franchise proliferates.
For example, if your franchise has 100 stores and each store needs LAM to support their local endeavours:
- 1 customised A4 flyer each month
- 2 customised social media campaigns each month
- 1 customised display ad campaign each month
- 2 customised press ads each month
- 1 customised in-store POS set each month
you are producing 8400 documents each year, taking about 840 design hours and there are more than 22 million brand elements seen across the distribution for the network. The impact, therefore, for being off-brand is vast.
Your central team probably doesn't have the level of resources to produce this volume efficiently (or at all) in addition to the central campaigns you are creating.
Because of resource shortage, you sometimes might be forced to turn a blind eye to off-brand production, or you have a zero-tolerance policy translating to minimal LAM production throughout the network.
The balance is out between brand and ease - the lack of ease for the production of on-brand materials means either less collateral in market (and therefore less opportunity to impact and create a sale) or off-brand material circulating.
The solution is brand automation
Creating the balance between brand and ease is possible - Outfit does this through brand automation.
Brand automation uses technology to automate on-brand marketing production. There are complex brand guidelines, long lead times and tight deadlines to navigate. Outfit allows your franchisees to keep the brand strong while creating collateral themselves.
Their local paper calls with a great offer, and franchisees want to put together a press ad. The deadline is today, and they know the central marketing team want to help but can’t hit this deadline. Outfit ensures a fast turnaround by drawing on existing, customised templates so franchisees can build and submit the press ad.
Outfit creates templates, customised to each store, so their details, products and most importantly the brand use are always correct. Each franchisee has precisely the templates they need to deliver their franchise marketing plan, every time.
While approvals are necessary because of the robust templates protecting the brand guidelines, you can be confident your franchisees are applying the brand guidelines through Outfit by implementing an approval workflow. We set up approvals so you can ensure no collateral is in market without the necessary checks from the franchisor or the master franchisee.