How franchise model spreads awareness by reaching out to larger audience

Franchisors could spend a million dollars on branding activities, but the whole exercise proves futile if the franchisees are not engaged, happy, and delivering what is required.

How franchise model spreads awareness by reaching out to larger audience

Monday July 26, 2021,

5 min Read

Businesses must constantly strive to make customers aware of their products or services. After all, irrespective of its size, familiarity with a brand is imperative for its growth. And, being a part of a franchise model helps business owners achieve a significant scale of brand awareness.  

Franchising provides benefits to both sellers and buyers.

Franchisors benefit the most from their ability to leverage other people’s money to rapidly expand the brand than using their own or through lenders or investors.

The initial franchise fee and the subsequent royalties collected enables franchisors to build a brand without passing on the control to outsiders or the requirement to repay lenders.

The fees and royalties collected are also used for funding operations at the headquarters, training and supporting franchisees, improving the quality of products and services, marketing and advertising the brand, and building brand awareness in the marketplace. 

Although the idea of starting a franchise may seem simple, and most business owners know how the model works, what they do not understand is the depth of franchising a business.

To make the idea work, it is essential to have the right documentation, legal agreements, and training programmes. When done correctly, a franchise model offers multiple benefits, including brand awareness. 

What does a franchise business entail?

In simple terms, franchising refers to the running of a business using some or all aspects of another successful business in a partnership.

The concept of franchising has evolved and grown, wherein a business grants permission to another business to operate under the same name or banner and establish a successful business, utilising the expertise of the parent company. 

The franchisor is the parent company, which lets the franchisees operate with the same goods or services, techniques, trademarks, etc., in return for a mutually agreed fee.

And, it’s the franchise agreement that governs the relationship between the franchisor and the franchisee. 

Operating as a franchisee business offers one major advantage over running an independent business — that of spreading brand awareness.

In a franchising business, all brand building costs are taken care of by being distributed over several businesses, saving on marketing and branding expenses. 

How franchise model builds brand recognition

Building a franchise model is a challenging business. A franchisor has to juggle two separate businesses with competing demands — first, the core business the original product or service, which is delivered to the customers, and the second, the franchise business, where its customers are the franchisees. 

Most companies entering the realm of franchising also enjoy other benefits, including the capital, motivated management, speedy growth, and risk reduction. 

A common mistake franchisors’ usually commit is they end up focusing their marketing initiatives on the end-consumer directly — the one who buys their product, attends their venues, or interacts with their services.

However, in doing this, the franchisor neglects their most crucial asset and audience — their franchise network. In order to grow, franchisors need to understand what the franchisees are seeking from the brand. This is where the real benefits of a franchise model lie. 

For the franchisor, it’s mainly the franchisees who are key to the success of the brand. They are present on the front line as the public face of the business and deliver the product to the general public.

Franchisors could spend a million dollars on branding activities, but the whole exercise proves futile if the franchisees are not engaged, happy, and delivering what is required.

For example, Subway and its franchise restructure programme have been negatively impacted by dissatisfied and unhappy franchisees in a public fashion. 

A franchise brand differs from the traditional business, which is the parent company, as the franchisee happens to be an extra stakeholder between the brand and the end consumer.

It is this relationship that the franchisee can use to its advantage to generate more awareness among people and reach a larger audience. 

When one starts a business from scratch, the founder needs to spend huge amounts of money, time, and efforts to keep it running. This is without any guarantee of the business being successful.

On the other hand, when one purchases a franchise, all the necessary groundwork has already been done beforehand. Though the franchisee does pay a small fee to the franchisor — directed towards carrying out centralised marketing activities — it is negligible in comparison to the huge investments made for establishing a completely new business. 

Moreover, the franchisee receives training and the necessary head office support directly from the parent company. This is essential, especially when the franchisee is new to the process of running a business and lacks prior experience. 

A small business cannot normally afford the support of national marketing extended to a franchisee. It can reach masses at half the cost and spread awareness about its operations.

While in cases of larger and more famous brands, the franchisees would even have customers queuing up at their doors (for example, Domino’s or McDonald’s).

As all the product selection and the marketing and advertising operations have been developed already, the franchise owner simply is required to take care of the daily operations of the business.

The best part — the franchisee gains numerous advantages from the association with the parent franchise company. The latter offers a good deal of business experience gathered over the years, which an average business owner would take a lot of time to acquire. 

Summing up

Overall, franchisees can and must play a vital role as brand ambassadors. On the other hand, a savvy franchisor needs to harness their franchisee’s enthusiasm and passion, empower and enable them to be out there, bring in new business, and keep the brand growing and moving ahead.

Thus, investing time and efforts in one’s franchisees is the best brand investment any franchisor can ever make. 

Edited by Suman Singh