Who is Responsible for Marketing in a Franchise Business?

Transcription:

Leslie Kuban:
Liane, welcome to the show.

Liane Caruso:
Thank you so much for having me, Leslie. I’m super excited to be here.

Leslie Kuban:
We’re going to have a very interesting conversation today. I look forward to seeing where it goes.

Liane Caruso:
I could talk about this for hours, so.

Leslie Kuban:
Yes. Well, for our viewers, who are meeting you for the first time, would love to know about you a little bit, your background and franchise marketing and now your role at Entrepreneur Media, congratulations on that and what that’s all about.

Liane Caruso:
Yes, thanks. I’m so excited to be a part of the Entrepreneur Media team. But basically, I’ve been in marketing my entire professional career, but back in 2010 I started my own agency and somehow, just like most of us, I fell into franchising. Started working with one Massage Envy owner, helping her with social media, this was back when social media was unchartered territory, fell into it, and then that led me into snowballing into social media, helping with local store marketing plans, grand opening plans, and so on. And then I sold my agency at the time and then started working for other franchise marketing agencies in the area. Most recently I had a fractional CMO consulting company and I was helping brands really dive deep with the expert level marketing strategies, especially during COVID when there was a lot of transition. And then back in September of last year, I was approached by Entrepreneur Media to join the team, to lead the franchise division. And so I basically run operations, sales, marketing, content, anything that has to do with franchising, I help oversee it and our teams that contribute to it.

Leslie Kuban:
So you’re really seeing the gamut then that’s fascinating, I’m sure.

Liane Caruso:
Yeah. I get to see the 50,000 foot view of all of the brands and franchise marketing and so it’s a cool seat to sit in.

Leslie Kuban:
Yeah. Yeah. So we talk a lot about on the show is that where franchising really has an opportunity to win is in service industries that have a very high demand for the services or the product, that demand is stable, it’s growing, which means there’s also going to be a lot of competition, franchised competition, non franchised competition. So having effective marketing and lead generation is crucial to getting and keeping customers. And Liane, we know there’s a lot of noise out there about, well where is the responsibility for this marketing and lead generation? Is it the franchisor? Is it the franchisee? I mean in reality, it’s both, but, Liane, where do we start thinking about the shared or balanced responsibility?

Liane Caruso:
Yeah, absolutely. It is definitely both, the responsibility lives that lies in both areas and maybe just a little bit different perspective. But as a franchisor, obviously, you need to have your franchise marketing strategy as an overall initiative and then have those processes, have those resources, have those vendors, and have that education for your franchisees in place so that the franchisees who buy into this system, who may or may not be marketers, really understand what they need to do on their end. And they need to understand their role and responsibility, it’s different in different franchise systems. So sometimes it is centrally managed by the franchisor and sometimes it’s the responsibility of the franchisee to find vendors or to vet different opportunities for franchise marketing. So I think first and foremost, just understanding what the relationship is and understanding the strategy and understanding what resources are available to you before you even get started.

Leslie Kuban:
And what if I don’t come from a marketing background? We tend to fall into our suits of strength and for some that might be finance, it might be leadership of people, but that’s not marketing for everybody. What if I’m a nurse or I’m a finance executive and this is not where I come from? How do I get my head in the right place, around my responsibility for marketing and lead generation so that I can be successful in my new business?

Liane Caruso:
Yeah, I think that’s one of the scariest parts of opening a new business and really not understanding marketing and what your role is in it and how to build your business in that way. So as a franchisor, they should offer educational opportunities, webinars, opportunities to speak with the vendors one to one. So while you may not be the hands on person executing the paperclip campaigns or writing the blogs, understanding what’s available to you, understanding how it works for you, and understanding what the goals and objectives to be will really set you up for success. If you don’t understand it, then you’re going to be frustrated and it’s going to set everybody up for tension and a stressful relationship because you’re not understanding what it’s doing for you and if it is or isn’t working. You need to understand if it’s also not working so you can stop it.
And so I think having a relationship with whether you’re a franchise business coach or you’re a franchisor, your marketing teams, and your vendors, so that they’re constantly keeping you informed and educated. Doesn’t mean you have to totally understand what you’re doing, but understanding the goals and objectives is critical.

Leslie Kuban:
And what I would add to that and share with our viewers is that just no matter where you are, in whatever state, you’re likely going to have a SCORE chapter or a small business development chapter, probably several of them, and these are wonderful resources at very low cost, often free, providing all kinds of training and coursework on all things, small business marketing being one of them. And the spirit of taking classes from SCORE or the SPDC isn’t necessarily to become the expert, but at least to have that overall awareness of, this is what social media marketing is, this is what mobile marketing is. So that’s a little plug for our partners at SCORE and SPDC to help new business owners learn about what these terminologies are so they can manage it more effectively. So Liane, if I have a franchisor, I’m likely going to have some contractual marketing commitment that I’m requiring of my franchisees. Talk a little bit about that. What are the typical marketing commitments that franchisors are including in their agreements that franchisees are signing?

Liane Caruso:
Absolutely. So typically there is a grand opening fee that you are required to spend, a certain amount is generally more money than what you’re expected to pay on a regular ongoing basis. And basically, those numbers are established by previous experience. Quite frankly, they understand what it takes and what it costs to do a grand opening and what it takes and what it costs to run an ongoing, successful marketing campaign. It is critical that you continue to spend those dollars because if you don’t spend, then you’re missing opportunity and you’re not getting the exposure that you need in order to bring customers in the door. So understanding that these franchise brands have put into place budgets, expectations, they’ve also vetted their vendors to understand what the brand expectations are and the goals and objectives. So following that system is very important, but the role that you play, understanding which vendors are available to you to execute those marketing programs and spending the dollars necessary. Again, if you don’t spend the dollars necessary, you will find yourself in tough times.

Leslie Kuban:
And Liane, to underscore a point that you just made is that, as a new franchisee, a new business owner, money is going out the door in the early months of the business for all kinds of expenses and sometimes people get a little rattled by that and they might look at their marketing budget as discretionary and you and I have both seen that’s the worst possible thing. So I think if there are prospective franchisees watching our show today, that would be something I’d encourage you to take to heart is that you’ve got to treat your marketing commitment as gold, more important than, or equally important to, anything else. That it’s not a discretionary spend. I’m sure you’ve seen that in your world as well, Liane.

Liane Caruso:
Absolutely. Marketing budgets are generally the first thing to get cut and that is the biggest mistake that you can do. Marketing has legs, it is not an on and off switch. It builds a foundation and then it continues to grow from there. Once you have raving fans, once you have customers who are happy, they start doing the work for you so they start to leave reviews and they help you with reputation management, they start doing referrals. Obviously, that’s the best marketing that you can have, but you can’t get that if they don’t know who you are, especially if you buy into a brand that’s not as well known, which is okay, it could be a fantastic brand, but they might not know who you are in Florida. Maybe they’re very well known in Georgia, but not known in Florida so it’s a good opportunity to you. You have to spend a little bit more money to get the name out there and to get that exposure and get that brand equity so then your marketing dollars start to wane off as you continue to grow and build your business.

Leslie Kuban:
Yep. And as you mentioned, we talked a little earlier that, this is different with a more mature brand versus an emerging brand and I wonder if you have any examples that come to mind of what does marketing execution at the franchisor level look like when it’s successful with a big brand and what does success look like with a younger brand? Any examples come to mind?

Liane Caruso:
Sure. So a couple different companies come to mind, Any Lab Test Now, based right with you in Atlanta. They have a great system in place. Not only do they have national campaigns running on your behalf, they have commercials, they have video OTT and CTTV programmatic advertising, but then the individual franchisees have campaigns that are running with the national campaigns in mind. So it’s almost a turnkey operation, which is very helpful to the franchisee, it’s a cost savings benefit to the franchisee because the marketing system is already in place and set forth by the franchisor, and then the franchisee can come in and say, turn on this location, these are the services I offer, and then it’s a real simple relationship with that franchise vendor.
A micro emerging brand or an emerging brand, I believe you’ve had VetCor Services on your show, Paul Huszar, I worked with them. They’re a little bit different, but they did a really good job at the beginning of laying the foundation of what the franchisees need from the very beginning. They put a marketing playbook in place which, like I said earlier, is ever evolving that’s going to consistently add no matter what size brand you are. They put in a local reputation management company so reviews and reputation management because reviews are critical in most businesses. And then they vetted several vendors in order to help them with their digital marketing. So they kind of piecemealed it a little bit more, but they have the resources necessary for the franchise brand and then they execute a pretty intensive marketing training program at the very beginning, and then keep that relationship, checking in with the franchisees on an ongoing basis.
So I think from the very beginning just having a strategy, having a plan in place, what is my marketing as a micro emerging brand look like for the next year? What do I know that I need to build up to? And then where do I see myself in five years and having the more holistic approach from a national perspective.

Leslie Kuban:
And that’s critical and something for entrepreneurs to really take to heart if they’re thinking about growing through franchising. That you’ve got to have a real marketing playbook, as you said, a detailed, the vendors lined up, the vendors vetted, so franchisees can hit the ground running and their expectations are met for the fees that they are paying in return for that franchising playbook.

Liane Caruso:
That’s correct. And that’s a good point too because you also will have a brand fund that you need to pay into for the franchisor. So I think as a franchisee, it’s your job and it’s your right to understand where those dollars go as well because those will be spent by the franchisor, usually in national PR campaigns or national television commercials or a software or service that is provided to you that’s a much inexpensive cost if they do it from a centrally managed perspective.

Leslie Kuban:
And Liane, we attend conferences, there’s all kinds of conferences in franchising and this conversation, we’re not even scratching the surface here on this big topic where there’s no right or wrong, really, around franchise, franchisee, franchisor marketing, and that balance. I’m wondering, what’s the biggest challenge that you have seen throughout your career on this, approaching this? How do we strike that balance between the franchisor’s responsibility, the franchisee’s, and what’s your thoughts on how to start to close that gap?

Liane Caruso:
Yeah, I think the biggest issue is communication and education. I think that franchisees have an expectation of the franchisor without really maybe understanding what their commitment is as well. Yes, they bought into a system, but they still have to execute and they still have to understand what they’re getting. And I think that it can potentially be very contentious if the two aren’t communicating, and that means the franchisor versus franchisee. So as long as there’s an understanding and there’s an education and there’s open communication, if something’s not working, the franchisor needs to know because then they need to know how they can better support the franchisee. If it is working, but the franchisee might not understand it, or they’re not really engaged with the vendor in that way, then the franchisor needs to help educate them on what their responsibility is in order to be successful. So at the end of the day, I think it’s just communication and education.

Leslie Kuban:
Good old-fashioned two-way communication, right Liane?

Liane Caruso:
Yeah, old school.

Leslie Kuban:
Well, as we start to wrap up, I’d love to know for viewers watching our conversation today, what would you like them to take away? What would be the bullet point that you’d like people to really stick as they’re thinking about being a franchisor or a franchisee?

Liane Caruso:
Yeah. I think it all goes back to understanding, doing your research, really understanding what you’re getting into. As we mentioned, every franchise system has a different system in place and they handle things a little bit differently. So if you’re buying into a franchise system and you’re going to become a franchise owner, understanding what’s going to work best for you and what that relationship looks like. If you are a very hands-on person, there are franchise brands that allow you that more hands-on approach. If you are not, there are franchise brands that take care of everything for you. So I think it’s truly understanding the relationship between marketing, what your role is, what the franchisor role is, and how you can best work well together and what your comfort level is. As a business owner, you’re going to have to wear multiple hats regardless so it’s really understanding how their system falls into what your expectations and how that aligns with what you’re looking to do.

Leslie Kuban:
Yeah. And the good news about that is it just requires some self awareness, what one’s strengths are, what they’re not, and due diligence, and if someone’s willing to really go through all the steps of the process. And this is the franchisor’s responsibility as well as to provide a pathway to understanding what they’re offering or what they’re not offering, people should be able to walk into their business with a pretty clear expectation of what their commitment is and what they can expect from their franchisor. Little bit of due diligence.

Liane Caruso:
That’s right. And being vulnerable, understanding that maybe this isn’t your skillset, but that’s okay, that’s why franchising is a great option for you. And then the other recommendation I would have is talk to the other franchisees, truly see what happens on a day-to-day basis, what their comfort level, how the vendors support them in a way makes them successful as well.

Leslie Kuban:
Yeah. Well, as we start to wrap up Liane, what’s ahead for you for the rest of 2022 and at Entrepreneur Media? What’s on deck for you guys?

Liane Caruso:
Oh, we have so much going on. We are reimagining everything franchising and how we support the franchise industry as a whole. So we’re creating more content and we’re creating content in all of the different ways that people consume content. So we have videos, podcasts, webinars, articles, social media, blogs, all of that good stuff. We’re at all of the events, I think we’ve got 22 on our calendar in 2022. And then most exciting is we’re launching Entrepreneur TV within the next couple of weeks so we will have TV shows on an app that you can download and it’s anything that has to do with business and entrepreneurship and true entertainment, but also education and learning. So I’m super excited about that.

Leslie Kuban:
That is exciting. Where can our viewers access that? Where they go to see the blogs and the TV show and the videos, is there one first point of reference they should look for?

Liane Caruso:
Sure. First point of reference is Entrepreneur.com. On Entrepreneur.com you can find any business leadership articles as well as the Franchise 500 list. From those lists we create several other lists, depending on what you might be looking for, so we have top food, best in category, we have top global, we have top home-based, we have top new and emerging, which I love that category. So lots of different ways that you can research franchising and then we make announcements on all of our social channels, of course we’re on Facebook, Twitter, LinkedIn, Instagram, and TikTok.

Leslie Kuban:
Well, that’s excellent. That’s one stop shop for people looking for information. Well Liane, thank you so much for joining me on the show today. That’s really exciting, as someone who’s in TV, I can’t wait to see the TV show. That’s really exciting.

Liane Caruso:
Yes. It’s exciting. We do have a couple franchise TV shows in the works too so stay tuned for that, and thanks for having me on Leslie, I appreciate it.

Leslie Kuban:
Excellent. And folks, thanks for joining me on another great episode of Atlanta Franchise Today. I hope you have enjoyed it and I look forward to seeing you again next week.