Franchise Advertising Agreement by sfg13442


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   Advertising Funds
Leveraging Collective Power for
      Marketing Success
Administering Advertising Funds
• When and how to structure local and national
  advertising funds
• Do we need and advisory council? How to build
  consensus for your plan.
• Can we use our ad fund for this? The do’s and don’t
  of allocation.
• Whose money is it anyway? Decision making and
• Encouraging participation and enforcing collection.
  What happens when not everyone agrees.
Administering Advertising Funds
• Jan Muhleman, President, re:group, inc.
• Jim Wassell, Chief Marketing Officer, The Service
  Master Company
• Cathleen Stewart, Director of Advertising and
  Marketing, Batteries Plus
• Steve Spicer, N. Dakota Area Area Developer, Chair
  Marketing Advisory Council, The UPS Store
Jan Muhleman, re:group, inc.
Franchise Advertising        • Computer Renaissance
  Experience                 • Domino’s Pizza
• American Speedy            • Duskin, Ltd.
  Printing Centers/Allegra   • Floor Coverings
• A&W Restaurants              International
• Ben & Jerry’s              • The Coffee Beanery
• Chevron                    • The Medicine Shoppe
• Children’s Orchard         • Tutor Time
Lots of Variables
•   System size and maturity?
•   What’s in the contract?
•   Do you have different contracts in the system?
•   Do you collect the advertising royalty?
•   Do you have local co-ops?
•   Do you place national media?
•   Do you have an Advertising Advisory Council?
•   Who owns the customer?
Other Questions or Issues?
  ServiceMaster Clean
National Advertising Fund
         Jim Wassell
    Chief Marketing Officer
              2007 Overview
• $4.8 million fund contribution
  – Franchise owners- .5 to 1% with Cap
  – Corporate- 5% of collected
• Major expenditures
  –   Regional Marketing – 30%
  –   Internal and external sales force – 30%
  –   National tradeshows -15%
  –   Web initiatives – 14%
              Management &
• Within franchise bi-laws, plan and spend is approved
  by National Franchise Council
• Bi-annual face to face meetings with NFC for budget
• Monthly conference call updates
• Audited annually
• Communicated via intranet site,
  printed newsletter and email
             1997 – 2006 Co-op
•   Improved perception of NAF
•   Easy to apply for
•   Reimbursed existing programs
•   Innovation / creativity
•   Limited incentive for working together
•   Limited involvement of local support
Ave. # participants per year = 426
Ave.$ dispersed per year = $887
             2007 – Forward
Regional Marketing Fund
• $ allocated for regional offices to spend against
  franchise marketing initiatives
• Approved initiatives must be new, not established
• Provide incentive to market together
• Move away from reimbursement & support to
  innovation & improvement
• Put funds closer to the need
• Opportunities have a greater impact at local level
     Batteries Plus

      Cathleen Stewart
Director of Advertising & Marketing
             Batteries Plus
• About Us
  – First store opened in 1988
  – Nearly 300 stores in 42 states
  – Comprehensive selection of batteries and
    battery related products
  – Serve Commercial and Retail customers
             Batteries Plus
• Our Fund
  – Started in 1994
  – 1% contribution per store
  – National Marketing not Advertising Fund
             Batteries Plus
• Fund Use
  – 1/3 Supports In-House Marketing Services
    • 16 Person Team Providing Design, Layout,
      Production, Media and Marketing Services
    • High Participation in these Services by Owners
       – Allows for Marketing Expertise while Maintaining
         Control of Local Marketing Efforts
           Batteries Plus
• Fund Use
  – 1/3 Supports New Market Development
    • Websites
    • National Accounts
    • Commercial Sales Program
              Batteries Plus
• Fund Use
  – 1/3 Supports Franchisee Services
    •   800# / Store Locator
    •   Public Relations
    •   Intranet
    •   Creative Production
    •   Tradeshow Booths
    •   Merchandising
            Batteries Plus
• Fund Use
  – National Advertising
    • Minimal Allocation to National Advertising
    • 500+ Stores
    • Consider Supporting Co-ops First
            Batteries Plus
• Our Council
  – 6 Elected from Geographic Regions
  – Serve a 3-Year Term
  – One Per Ownership Group
  – 3 Managers / Officers from Franchisor
           Batteries Plus
• Our Council’s Purpose
  – Promote Open and Equitable Use of the
  – Address/Resolve Issues of General Interest
  – Champion the Fund Use to Owners
            Batteries Plus
• Whose Money Is It Anyway?
  – Direct Control is with Us
  – Significant Consideration to the Council
            Batteries Plus
• Getting Consensus for Our Plan
  – Council is Open & Willing to Test/Validate
  – Council Encourages Owners not to be so
    Singular in Scope
              Batteries Plus
• Do’s & Don'ts of Allocation
  – Focus on the Do’s:
     •   Get Consensus
     •   Openly Communicate/Report
     •   Expand the Vision
     •   Manage Expectations
The UPS Store Advertising
          Steve Spicer
   Chairman, The UPS Store
   Marketing Advisory Council
                            The UPS Store
       • MBE
                – Franchisor of The UPS Store and Mail Boxes Etc.
                – Subsidiary of UPS
       • Retail locations selling business services to small
         business and personal customers
                – 4,262 The UPS Store locations domestically*
                – 287 The UPS Store locations – Canada and India*
                – 1,300 Mail Boxes Etc. locations – Domestic and

*As of December 2006
     Why Me – Steve Spicer?
• Chairman of the Marketing Advisory Council
• Not a corporate employee
• An area franchisee and individual store franchisee
   – Own territorial rights to franchise The UPS Store brand in
     North Dakota, South Dakota and Nebraska
   – Own two The UPS Store locations
• Part of the network for 15 years
• Other committees
       The UPS Store
   Advertising Support Team
• MBE Corporate Marketing Department
• Doner Advertising
• Marketing Advisory Council
   Marketing Advisory Council
• 12 elected members
   –   8 franchisees representing each region (domestic only)
   –   2 area franchisees representing entire area community
   –   1 chairperson, a franchisee or area franchisee
   –   1 corporate representative
        • VP of Marketing
• Meet face-to-face quarterly
• Monthly conference calls
• Guided by by-laws that mirror the rights granted in
  the Franchise Agreement
   How is advertising funded?
• National Advertising Fund (NAF)
   – Funded through 2.5% contribution on revenue subject to
     royalty from the franchisees
   – No corporate funding directly to the NAF
• Additionally, franchisees pay a 1% Marketing Fee to
  MBE that is administered internally by MBE
   – This fee covers marketing costs related to merchandising,
     public relations, product development, research, etc.
    How the NAF is administered
•   MBE has the legal right to manage all aspects of this fund, with
    the exception of approving the funds to support the media plan
     – This approval needs to be done by the Marketing Advisory Council
•   However, MBE Marketing works very closely with the MAC to
    gain input and support for:
     –   Strategic Planning
     –   Product Development
     –   Media recommendations
     –   Promotional ideas
     –   Creative concepts
     –   Merchandising
     –   Communications
            Advertising Co-op
                Additional to NAF
• Each store is required to be a part of an advertising
  co-op and contribute to their co-op advertising fund
   – An additional contribution outside of the NAF
• 191 co-ops
   – Doner and MBE co-op teams work with the co-op leadership
     to manage each co-op’s marketing plan development, media
     and promotional planning, media buying and promotional
         Doner – Who are they?
•   Handles all national and co-op advertising services for The UPS Store
    brand domestically
•   One of the largest privately held, independent advertising agencies in
    the world
•   Headquartered in Southfield, Michigan
     – Offices in Boston, Cleveland, Dallas, Newport Beach, Tampa, Toronto,
       Montreal and Vancouver
•   Billings approximately $1.6 billion
•   Clients include
     – ADT, American Greetings, Blockbuster, Cintas, Cox Communications,
       Helzberg Diamonds, HGTV, Mazda, PacSun, PetSmart, Progressive
       Insurance, Serta, Sylvan Learning Center
• MBE, a UPS company, is the franchisor for The UPS
  Store brand
• All franchisees contribute 2.5% to a National
  Advertising Fund
   – Administered by MBE Marketing Department working with the
     Marketing Advisory Council
       • The MAC must approve any funds used for media
• MAC includes elected representatives, franchisees
  and area franchisees, and one corporate
• Meet quarterly, with monthly conference calls in-

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