The story you’re about to read is true. The names have been changed to protect the hapless.
We recently tried to help a gentleman (we’ll call him The Franchisee) who bought a franchise from a company (we’ll call it The Franchisor). The Franchisor promised The Franchisee the space he’d leased would be 40-percent occupied when he opened. (It wasn’t.) The Franchisor promised The Franchisor they’d provide adequate outdoor signage. (They didn’t.) The Franchisor promised The Franchisee they’d be responsive to his needs. (They weren’t.)
On the bright side, The Franchisee was given the privilege of forking over a number somewhere in the mid-six-figures for the honor of operating under the name of The Franchisor. In exchange for The Franchisee’s investment, The Franchisor, thereafter, in good faith:
- Gave The Franchisee no marketing support
- Required The Franchisee to pay $10,000 to The Franchisor’s captive advertising agency
- Allowed The Franchisee a single web page, the links from which directed all traffic to The Franchisor
- Prohibited The Franchisee from creating his own website to promote his own location, even if the website positioned The Franchisee’s location as a wholly owned franchise of The Franchisor, with a link to The Franchisor’s website
- Suggested The Franchisee send out direct-mail postcards, to be purchased from the captive advertising agency, every six weeks for the bargain-basement rate of $700 apiece
- Encouraged The Franchisee to buy Facebook advertising, which would point to The Franchisees’ web page, from which The Franchisor would neither derive nor report any meaningful traffic statistics.
So. What did our friend, The Franchisee, do? He did what any other self-respecting businessperson would do given the same set of circumstances: He went broke.
If you believe resources are finite — or if you’re of the conviction that you can’t spend money you don’t have, particularly for no return — you’ll be working from an affordable, strategic marketing plan with direct lines to achievable, tactical results.
If, on the other hand, you’re not encumbered by reality — or if you’re of the conviction that money comes from some inextinguishable source requiring no generation — The Franchisor’s business model is flawless.
See you on Facebook.