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About 5 years ago I was working at an agency. A good size; some good client partners and we’d been landing a few interesting consumer brands that helped get people excited about work each day. Suddenly there was a lot of momentum behind some conversations the business development team were having with a pretty high-profile multinational brand. Locations all over the country; some big numbers being mentioned when discussing budgets. I, like everyone else, was swept up by the excitement – this looked like a real whale! And because I didn’t know better, I didn’t pick up on the fact that this new client had a franchise model. In fact, no one at the agency seemed to pick up on that fact, right up until the point where we were servicing them and suddenly we realized that we hadn’t got a new client, we’d got 80.
Those first 6 months were challenging. There were a lot of lessons learned on both sides over the course of various crisis talks and ‘reset moments’. The first general (and cliche) mistake we made – and that most agencies make – is overpromising. Pulling in various specifically requested experts that were effectively the same senior digital marketer in a series of ever more elaborate fake beards. But the biggest issue was the failure to recognise that franchises and their individual franchisees are a different beast to a typical client. We didn’t understand nuances, like the two-way pressures that exist between corporate and franchisees, and that trying to be all things to all parties was never going to be a successful route. In time, we straightened things out, but it took a lot of effort and trust building. So to help you, here are 3 of the things we learned:
Centralize Communication
This one should be obvious – or should have been. But attempting to establish client relationships with every franchisee is not going to work. Understand that among the many things that the corporate head office is responsible for, marketing (raising brand profile + providing a steady source of customers) is a significant one. Significant in terms of the percentage of franchise fees dedicated to it and therefore significant in the level of scrutiny each franchisee places on those efforts – and rightly so. You want to take on the responsibility for the marketing, not be the buffer for those internal pressures.
Understand how franchise reporting works
Building off the back of the previous point – understanding the nature of the relationship between corporate headquarters and their franchisees means you can find ways to make their lives easier. A key issue for a lot of franchisees is transparency: where’s their money going and what are they getting in return? A scalable solution is a must here – you don’t want to be pulling 80 reports every month. Hawke AI had actually been in development prior to this client coming on board – and it supercharged the development of its scalable reporting with performance and marketing budget insights. The ability to segment results and create live sharable reports was invaluable.
Monitor budgets
As previously mentioned, the key friction between corporate and their franchisees is where the monthly franchise fees are going. This will absolutely be a situation where underspend will be perceived as badly as overspend – those monthly fees are never cheap and you can bet every franchisee will want to see that the money they’re forking out is actually being invested in ways that help them. Your management and reporting system needs to be able to see how budgets are being invested across different (at times very specific) geographies and to be able to quickly identify spend discrepancies to pull levers at the right time. Otherwise there will be awkward conversations.
They say “if you’re going through hell, keep going” and that’s exactly what we did. The relationship improved and thrived once we understood the nature of the challenges we were up against. What saved us was Hawke AI’s ability to monitor and report at scale – so now you don’t need to go through the same pain we did. In fact, we count a number of franchise businesses among our users who utilize the tool internally across their franchisee network. Whether you’re a seasoned pro or if you’re working with your first franchise, let us help – because we know first hand how tricky it can be.