We were recently engaged by a group of four large, independent agencies that wanted to review their options for forming a combined ‘super office’.
What they didn’t realise at the time was that they were actually proposing something that was simply “same, same but different”. They thought they were building a better mousetrap, but in reality they were just shifting the deckchairs on the Titanic.
Partly to blame was the fact that they were focusing on running a bigger agency, not building a better, more streamlined and profitable combined business.
As part of the review, they wanted us to look at franchise and marketing groups and what they could bring to the table.
And here lay the conundrum.
Why was this raised as a last-resort approach?
We understand that some people have jaundiced views and that marketing and franchise groups are not for everyone, but we firmly believe this sector of the industry deserves a more positive and strategic position than it currently receives in some circles.
Many of today’s emerging brands are enjoying rapid growth, increased brand awareness and improved market share. They are not the mainstream vanilla products of days gone by.
There are some exceptionally innovative, relevant and progressive franchise and marketing group systems available. The key is how you approach the opportunity.
When reviewing marketing and franchise groups, we recommend you ask yourself the following:
- What are my expectations from a marketing or franchise group?
- Do I have an end game in mind before I start?
A franchise or marketing group will provide the collateral, branding, support services and IP to assist you build your asset.
Approach the opportunity with the mindset that the franchise or marketing group is your equal business partner, helping you to build your agency. You both have a vested interest for it to succeed.
Here are our top tips:
- Understand and investigate the value proposition of each group thoroughly.
- Interview numerous groups. Find out which model is the best fit for your business.
- Find out who the key people are in the group who will assist you in achieving your goals.
- Talk to existing group members to get their feedback, finding out what’s worked for them and what hasn’t.
- Do a cost/benefit analysis as part of your investigation.
- Don’t think that marketing and franchise brands will instantaneously grow your business. It takes significant input from you to use the IP to your advantage.
- Understand the costs associated with marketing and franchise groups. Ensure they are treated as operating expenses in your management accounts.
- Understand that franchise and marketing fees are the investment you make in developing your business.
- Seek independent advice all the way through the process.
If you change your thinking, you may be pleasantly surprised at how marketing or franchising could significantly assist your business.