Franchise Marketing

How to allocate a franchise marketing fund so franchisees see results.

Franchisees pay into the brand fund every month and want to know what it produces for their location. This is a practical framework for splitting the fund between brand and local performance, and for reporting results each franchisee can trust.

Key takeaways

  • Split the fund into brand building, shared infrastructure and local lead generation, with written rules for each.
  • Measure local spend per location: leads, cost per lead and booked jobs.
  • Use a forecast to set expectations for each territory before spending.
  • Report to franchisees side by side, by location, before the P&L forces the conversation.

What is a franchise marketing fund?

A franchise marketing fund, often called a brand fund or advertising fund, is a pool of money collected from franchisees, usually as a percentage of revenue, and managed by the franchisor for marketing that benefits the system. How it may be spent is generally set out in the franchise agreement and disclosure documents.

Check your franchise agreement and Franchise Disclosure Document before changing how the fund is used. The framework below is about strategy and reporting, not legal requirements.

How should a franchise marketing fund be split?

Most systems split the fund into three buckets: brand building that lifts every location, shared infrastructure such as the website and tracking, and local performance advertising that generates leads in each territory. The right proportions depend on brand maturity and how much franchisees also spend locally.

BucketWhat it coversHow to measure
BrandCreative, awareness campaigns, streaming TV, PRBranded search volume, reach, direct traffic
InfrastructureWebsite, location pages, call tracking, CRMUptime, lead routing speed, tracking accuracy
Local performancePaid search, Meta and local campaigns per territoryLeads, cost per lead and booked jobs per location

How do you allocate local ad spend across locations?

Allocate local spend by opportunity and contribution, not just equally. Consider each territory’s population and search demand, how much each franchisee contributes, competition and click costs, and each location’s capacity to take on more work.

An equal split can starve high-demand territories and waste money where demand is low. A forecast per territory makes the trade-offs visible before the money is spent.

How should franchisors report fund results?

Report every location side by side: spend, leads, cost per lead and, where possible, booked jobs or sales. Show results against a forecast so franchisees can see whether underperformance is a market issue, a marketing issue or a follow-up issue.

That side-by-side view is what lets corporate see which franchisees need help before the P&L shows it. It is the core of our franchise and multi-location advertising work.

Should franchisees also spend locally?

Many systems require or encourage a local marketing spend in addition to the brand fund. Coordinating the two avoids franchisees bidding against each other or against corporate campaigns for the same searches.

See how to structure Google Ads for multiple locations for the account setup that prevents that overlap.

Questions

Frequently asked questions

What percentage of revenue goes to a franchise marketing fund?

It varies by brand and is set in the franchise agreement. Contributions are commonly a small percentage of gross revenue, and many systems also require separate local marketing spend.

Can franchisees see how the brand fund is spent?

Reporting obligations depend on the franchise agreement and applicable law. Regardless of requirements, clear location-level reporting builds trust and reduces disputes.

How do you prove the brand fund is working?

Track branded search and direct traffic for brand spend, and leads, cost per lead and booked jobs per location for local spend, compared with a forecast.

Should corporate or franchisees run local ads?

Either can work. Centralized management usually gives better consistency, tracking and buying power, while franchisees contribute local knowledge and follow-up.

Free franchise projection

See every location’s numbers side by side.

Tell us about your system. We will forecast leads and cost per lead by territory before you change a dollar of the fund.