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Do I have a say in how my franchise is marketed by the franchisor?
In most cases, the franchisor will undertake responsibility for advertising, promotion and public relations for the network. It is the franchisor’s obligation to develop and maintain the reputation of the brand and many franchisors set up a central advertising and marketing fund to exploit the national corporate image of the franchise network as the provider of goods and/or services.The franchisor will make a charge to each of its franchisees of a sum usually calculated as a percentage of the franchisee’s gross income, which is paid into an advertising and marketing fund. The sum of all of these contributions is spent by the franchisor on advertising and marketing on behalf of the network.The franchise agreement may be specific about how the advertising and marketing contributions will be spent, which may include a wide range of activities such as developing a central website to exploiting the development of national accounts whose local business could be transacted with franchisees or the cost of the franchisor’s employees carrying out advertising and promotional work on behalf of the network.The franchise agreement may contain a more general clause allowing the franchisor to carry out such marketing or advertising activities on behalf of the network as it thinks fit. In either case, most franchisors will want to have complete control over how the advertising and promotional activities upon which the sums in the fund are spent, as it is the franchisor’s name and system that are being advertised. A franchisor may decide to consult with individual franchisees or a franchisee association on how the sums collected in the advertising and marketing fund should be spent. It will certainly be useful to the franchisor to discuss its marketing and promotional ideas with its franchisees before they are launched and to listen to suggestions and feedback.
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