this is part 4 of our franchising 101 series. if you missed this go back to read part one: what is franchising? (the relationship, legal stuff + the most important clause in franchise law) + part 2: standard franchising fees – the initial fee + part 3: standard franchising fees – the royalty fee. let’s move on to the third of the 3 standard franchising fees you can expect to pay when you become part of a franchise system.
standard franchising fee #3 – the ad fund / brand fund.
the final standard fee you’ll find is the ad fund or brand fund fee. again, the franchising forefathers fixed this one too because it’s almost always 2% (ours is 2%).
unlike the initial fee and the royalty – this fee is NOT revenue for the franchisor. it is simply collected, pooled and allocated by the franchisor (with the help of a franchise advisor committee) to be spent on strategy, execution and initiatives that relate to the brand and generating of customers and the driving of revenue.
this is a huge differentiation for franchising over other small businesses and competitors. in no world could a one off business ever cover the cover of things that the power of everyones pooled 2% can create. things you can expect you’re brand fund to cover (or at least what our does):
x. strategic development.
- annual, quarterly and monthly planning
- research and development
- national marketing annual strategy and budget
- seasonal campaign development (usually at least 1 per quarter)
- larger brand level initiatives (new services/categories/retail products)
- promotional development, both national and local
- local marketing toolkit and individual bar strategic development
- media and influencer coordination and support
- analysis and reporting
- graphic design for all materials
- copywriting: all materials and coordination of translation when necessary
- photography: photo + video shoots and stock photography
- campaign execution including development of all materials, print coordination, posting and reporting
- email newsletter ideation, creating, scheduling, management, reporting
- national ad development and deployment
- digital ads: management of agency. reporting, communication to bars, administrative processing
- local level digital ad consultation, management, analysis + reporting
- franchise partner support, design requests, bar level promotions
- website: design, development, updates, hosting
- seo for website, all bar level pages and new bars opening
- newsletter / marketing suite, ongoing automations, api management, reporting
- weekly check ins with software companies used for bar marketing
- social media: content creation, copy development, management (of brand page + all bar level pages), engagement
- administration: forecasting, bookkeeping, cashflow management, rate negotiations, contracts
x. ongoing fees
- programs, google map fees, adobe, stock imagery, etc.
- booker marketing suite access, api
- web maintenance and hosting
- prizing and giveaways
alright! now that you know all about the 3 standard franchising fee’s like i mentioned in the other posts – there. are other fee’s you can expect as systems differ and you will require specific things to run your business (ie: we have a spa software fee because we require spa software to run our bars). all fees will be listed out in the disclosure document/franchise agreement.)
if you’re interested in finding out more – join one of my webinars (link on the right) or…
note: all of this information was current as of today’s date, june 4th, 2021. it in no way may be valid or true beyond today’s date. i’m obviously not a lawyer and so none of this should be taken as legal advice. it’s just anecdotal info that’s i’ve gleaned from my years as a franchisor and was current info about my system at the time of writing this. stuff might be changed and so any current information about THE TEN SPOT® franchising system should be taken from our disclosure documents, franchise agreement, operational manuals and guides. amen!