While it’s of utmost importance that you have faith in the particular franchise you’re thinking of investing in, know this one fact: if the franchisor doesn’t have a sturdy and effective marketing plan in place, you’ll go nowhere as a franchisee.
If you’ve given serious thought to buying a franchise but are unsure as to how to research a franchisor’s marketing plan, here are some helpful guidelines:
- Brush up on the basics. Learn the basics about franchise marketing plans and how they work. In a nutshell, the marketing plan is the map laid out by the franchisor that details how business will be brought in. You as a franchisee will contribute a set amount of money or a percentage from sales into a collective marketing plan pool (one that other franchisees contribute to as well), which the franchisor controls. The franchisor doles out money from the pool in accordance to your needs as a franchisee, covering such expenses as print advertisements, TV commercials, and direct mailings to both potential and existing customers. The plan should also cover the in-house expenses of marketing, such as fees paid to advertising agencies for their services.
- Ask the right questions. You can get a good idea right off the bat about the durability and success of a franchise’s marketing plan by asking some of these simple questions: Do you know and meet the needs of your customers? Do you understand the tastes of your customers? Do you know the strengths and faults of your competitors? (In many cases you may yourself be an active customer of the franchise you’re thinking of buying into, so the answers to these questions can be arrived at easily.)
- Request more information. In some cases, however, potential franchisees don’t know much about the franchise they’re interested in buying into (perhaps they’ve learned from a distance about a particular product or service a franchise markets and sells, and want to know more). If you fall into this category, simply contact the franchise and request all available public information pertaining to the marketing plan. Most franchises easily comply with this request, as they look at you as a prospective source of income.
- Ask to see the TOC. One specific item to inquire about is whether or not you can get a peek at the marketing support guide existing franchisees use. Much of the content in this guide may be too sensitive to hand out to prospective franchisees, but the franchise company should be able to provide you with at least the table of contents. This may not sound like much, but the table will give you a solid overview of the blueprint the franchise uses in marketing the brand and product.
- Talk with other franchisees. This is the single most important method to collect information about a franchise’s marketing plan. Ask specific questions about sales, which avenues of advertisement work best at reaching the public, and what things — if any — the franchisee would change about the marketing plan. Needless to say, you’ll be able to determine a lot about your potential franchising future after gauging the franchisees’ level of satisfaction with the marketing strategies they’re directed to use.
- Determine if franchise is receptive to franchisee input. Most franchises grant their franchisees a certain amount of leverage in the creation of a marketing plan. Ask franchisees how much say they generally have in making improvements to the marketing plan. Also ask whether or not ideas and strategies they’ve suggested have actually been taken up and used by the franchisor. (You’ll be able to get a good handle on the amount of creative breathing room you’d have with this particular question.)
Be sure to take a look at AllBusiness.com’s helpful sample marketing plans.