Marketing Related Questions To Ask Other Franchisees During Due Diligence

27.07.22 03:27 PM By Stacey Riska

Marketing Related Questions To Ask Other Franchisees During Due Diligence

We're continuing with the questions you should be asking franchisees during your due diligence phase of evaluating franchises. We've been through some pretty good questions before and a bunch of different categories. If you want to know what those are, you'll have to go back to previous posts. But today we're covering one of my favorite topics. I know Stacey's going to be super excited about this one today because today we're talking about franchise marketing.

So there are three questions. We're going to ask Stacey the question and she's going to answer as a prospective franchisee purchaser, based on our experience, and she's going to tell you why she believes this question is an important question to ask. I may add some comments. 

What kind of marketing support does your franchisor provide to your marketing efforts? What might you change if you could?

Definitely, a question you want to ask a prospective franchisee or a current franchisee. So I'm a current franchisee. You're asking me what kind of franchise marketing do I get? And my answer to you would be not much. 

So if you're looking to invest in this franchise, I would tell you that you're going to really need to do your own marketing. And it's very locally oriented. The franchise every once in a while, will come up with some big brand pretty stuff that you can maybe repurpose, but you don't get a lot of that boots on the ground, guerrilla marketing. Now, in most cases, franchisors don't really help you with local marketing. So you want to understand, as you're talking to different franchisees definitely understand where they are on the tiers (of performers). Are they a top performer, a mid performer or a bottom performer?
My guess is anybody who's a top performer, a key reason is the marketing, and what kind of marketing are they doing? Because when it comes to marketing, there's digital marketing, including a website, social media, email, and so many different things you could be doing online. But there are also offline things, as simple as a wrapped vehicle, business cards on your vehicle, door hangers, direct mail, knocking on doors, networking … so many offline strategies. 

So understand the mix of what the mid, the top and the bottom performers are doing. Understand how much they're spending on franchise marketing. What will it cost you to get a customer client or patient in the door? I can go on and on about marketing.

A lot of the franchises that we work with do a lot of the marketing for their franchisees and it's really important to differentiate what you're getting from them versus what you're going to have to do on your own. And it's different. Every franchise is very different in this respective topic. So make sure that you get a clear idea of, number one, what are the top, mid and lower franchises spending on marketing? You may be paying a marketing fee in the franchise that you're going into and if you're paying a marketing fee or even not paying a marketing fee, what are they going to do for you? 

As Stacey said, one of the things that I don't think we asked much about is marketing. We weren't afraid of it though, because we came from a marketing background. So it wasn't such a big deal to us that we didn't get any marketing support. So for you, that may be much different. You may be in a situation where you're going to rely on the franchisor's marketing for your success. So make sure you get answers to those questions.

Is the franchise company's advertising program effective? 

Now, again, this comes back to what I had just said, but Stacey, what do you think?

If you're asking me that as a prospective franchisee, I would answer that I wasn't really aware of any advertising that our franchise company was doing. They were more focused on their brand. They were going through a redesign of their logo, just more internal branding and getting more franchisees into the system that was kind of their advertising, but you would never see them on TV or radio or anything like that. It depends on some of the franchises that you look at.

If they're going to have a much more robust marketing strategy for you where they probably do some or most of the marketing for you for a fee, you will pay for that somehow or another. It's really important to know if they're doing advertising, is it working right? That's really the question. So if you are evaluating a franchise where they are doing some advertising, just make sure that you get some feedback on, hey, is this really helping because otherwise, you're wasting your money. 

So let's go onto number three. 

What additional things do you do to generate new business in your franchise?

I like that one … that's a good question. So answering that as a franchisee talking to somebody who's a prospective franchisee, I would say that this is one of the best things that I really enjoy about this franchise (we have) is that there were multiple different, multiple business models. In our franchise, we could do event-based and that had multiple facets to it. You could do brick and mortar. You could do catering. And I'm all about multiple streams of revenue and diversification. 

So I actually really like that . Now in other franchise concepts you may not have that option. You have to follow the franchise system and they may have a specific way that you do business, which is only one model. It may be specifically retail, or it may be specifically the man in the van kind of a concept. So it's really important to understand how you generate new business. How do you get the customers in the door? Does your franchise help you with that when it comes to marketing or are you kind of stuck on your own? In our case, our coffee smoothie business totally relied on us to generate new customers.

I think this question has an underlying question: what's working for you? What franchise marketing is working for you that you're doing, meaning that, is it at the franchisor or the franchisee level. It's important to know what those things are because it's really easy to go out there and spend your time in the wrong place on marketing.

These are the top questions we are giving you that are generic to open up the conversation. We are going to end with that. If you'd like a copy of this questionnaire: questions to ask franchisees please just click on this link and ask us to send you a copy.

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 Author Bio

I’m Stacey Riska aka “Small Business Stacey”, your franchise placement specialist. I help aspiring business owners find the PERFECT franchise so they can get to the next level in life and business.
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