Administering 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 control. • Encouraging participation and enforcing collection. What happens when not everyone agrees. Administering Advertising Funds Moderator • Jan Muhleman, President, re:group, inc. Panelists • 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 • $4.8 million fund contribution – Franchise owners- .5 to 1% with Cap – Corporate- 5% of collected • Major expenditures – Regional Marketing – 30% – Internal and external sales force – 30% – National tradeshows -15% – Web initiatives – 14% Management & Communication • Within franchise bi-laws, plan and spend is approved by National Franchise Council • Bi-annual face to face meetings with NFC for budget discussion/approval • Monthly conference call updates • Audited annually • Communicated via intranet site, printed newsletter and email 1997 – 2006 Co-op Benefits • Improved perception of NAF • Easy to apply for Challenges • Reimbursed existing programs • Innovation / creativity • Limited incentive for working together • Limited involvement of local support Ave. # participants per year = 426 Ave.$ 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 programs • 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 Support 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 Fund – 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 Overview 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 international* *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 (MAC) • 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 support 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 Summary • 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 representative • Meet quarterly, with monthly conference calls in- between QUESTIONS?
Pages to are hidden for
"Franchise Advertising Agreement"Please download to view full document