When entering a master franchise agreement one must pay particular attention to the section on advertising and marketing requirements. Generally speaking franchisors are interested in secure brand name recognition in the assigned master franchise territory (County, State, Country). The franchisor also understands what works best for their business model in attracting new business, and or has probably given careful consideration to how this will affect the master’s franchise sales, and the over-all brand name.
Still, it would be irresponsible to believe that the marketing and advertising that has worked in one region or country will work the same in another. Indeed, there needs to be regional variation’ and often the master franchise buyer will have some decent insight into their own territory. What works one place will not necessarily work everywhere. Therefore the master territory buyer will need to look into the master agreement and may need to negotiate some changes.
Global Franchise had a particularly telling article in their 2016 December issue titled; “Fourteen Questions for a Master Franchisee Buyer” and the well written piece noted that master franchise buyers certainly need to ask themselves; “Who is responsible for advertising in my Territory?” and went on to say: “The master franchise agreement sets forth the parameters of who is responsible for advertising, marketing and related activities. The master franchisee will likely have the obligation to develop and implement a marketing plan for each territory. The franchisor will either require or reserve the right to review and approve the marketing plan and any materials used for advertising purposes.”
One thing I had learned in setting up master franchises for my company was that what worked in California did not work so well in Pennsylvania, Texas, Florida, Arizona or Colorado. The weather was different, the culture slightly different, and the buyers were not always the same types. And mind you, this is all one-country. As I set up master agreements in other countries the regional variation with advertising, branding and marketing got even more diverse, and that was a good thing too. Had it not, or if I’d forced my master partners to do things the way I’d always done them, I doubt they could have succeeded or stayed on schedule as they developed their cluster of franchisees to extend our brand name.
Let’s face it, as a franchisor, the worst thing that could happen would be for a master franchisee to go out of business and then have burned territory and a tarnished franchise brand name in that territory. It’s hard to pick up the pieces when that happens. Suffice it to say it’s better for all concerned when regional variation is in the mix when it comes to marketing and advertising. So, master agreement signers ought to realize that franchisors ‘get this’ and are often willing to negotiate the terms under these provisions. Think on this.