What is an advertising fund and why should I pay into it?

Ongoing advertising efforts of franchise businesses are funded by a joint advertising fund. It is financed by regular deposits of all franchisees, which is either included in their current franchise dues or it is calculated by their net revenues. For many franchisees, however, arises the question: What are my advantages of an advertising fund?

Admittedly, to gain new customers for your store or to keep regular customers you have to take local marketing measures yourself. So nevertheless you have to deal with the issue marketing. The joint advertising fund, however, still has numerous advantages for each franchisee.

First of all, with the available budget franchise businesses are able to operate professional marketing. Marketing experts design a concept for a nationwide advertising concept and help in this way to strengthen the brand. Even without knowledge in marketing you are able to address your target group directly via various marketing media.

Many smaller businesses only have a low budget for marketing measures in their disposal, thus their advertising possibilities are small. The franchise’s advertising fund enables a higher reach, not only because of the advertising possibilities, which would not be affordable on your own, for example radio or television spots. Your brand’s level of awareness rises, the gaining of new customers is easier in this way.

Furthermore, the fund gives you the possibility for customer satisfaction research, as well as brand- and product development. What do my customers think about my business? What distinguishes us? What can be improved? Knowing what customers think about a business should not be underestimated. Only in this way you are able to improve, deal with negative feedback and win customers permanently.
Without an advertising fund and the joint marketing strategy a franchise business as a brand would not be able to expand its market strength and remain competitive permanently.

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