Branding and marketing are crucial for long-term business success. The amount of time and money required to develop a new brand is one reason why people choose to invest in franchise opportunities instead of creating a company from scratch on their own.
Signing a franchise agreement is like buying into an existing brand. It takes a lot of the footwork out of marketing. The entrepreneur pursuing a franchise opportunity can benefit from the franchisor’s long-term marketing efforts. National and international marketing campaigns can drive brand awareness and help consumers understand what a company has to offer.
It is often necessary to develop localized marketing tactics to appeal to the community that might patronize a specific franchise location. Attempts to market locally might lead to significant conflicts between franchisees and franchisors.
Why local marketing causes dispute
There are three main reasons that local marketing can cause conflict between companies offering franchise opportunities and those operating franchises. The first involves an outright failure to fulfill marketing obligations.
Franchisors often commit to making a specific amount of investment on the local market to help the franchisee attract new customers. If the company does not run its national or regional marketing campaigns locally, consumers may not even realize that there is a franchise location nearby.
Other times, the company may invest in local marketing, but it may do so poorly. For example, the company may not customize or localize marketing efforts at all. What works in another region might potentially alienate customers near a specific franchise location.
Finally, there can sometimes be disputes when the franchisee decides to market the company using their knowledge of the local community. Their actions might technically violate the agreement with the franchisor and may undermine broader branding efforts.
Franchisees feeling frustrated by an inability to market locally, a lack of investment or improper marketing efforts may need to take legal action. In some cases, they may be able to move forward with their own marketing efforts, and a franchise agreement or compel the franchisor to improve local marketing efforts based on the contract they initially signed.
Reviewing a franchise contract with a skilled legal team is usually the first step necessary in a dispute with a franchisor. Marketing issues can undermine the success of a franchise unless a franchisee takes steps to correct the issue.
NOTICE: This blog is intended solely for informational purposes and should not be construed as providing legal advice. Please feel free to contact us with any questions you may have regarding this blog post.