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
  

x. execution

• 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
• translations
• playlists
• 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.)

x.kristen

if you’re interested in finding out more – join one of my webinars (link on the right) or…

x.kristen

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!