Evaluating Potential Marketing Partners? Ask for Their Marketing Disclosure Document
Prospective franchisees dive deep into your FDD before buying. It’s time franchisors follow that due diligence example by reviewing agency’s marketing disclosure documents when exploring new or reviewing current relationships.
By David Chapman
Franchisors are required to be completely transparent about the franchise opportunity they are offering to qualified franchise candidates. Each franchise brand’s franchise disclosure document includes 23 items that reveal the good, the bad, and the ugly about the franchise opportunity -- no fluff, no creative language, no advertisements. Just the facts.
Candidates can flip to Item 3 and determine if the brand has ever faced legal battles. Items 5-7 show how much it costs to buy in. And the much discussed Item 19 shows what they can expect to earn if they join the franchise family.
Through a series of page flips (or more likely, digital clicks), prospects can quickly undress a franchise brand, bypassing a suave sales pitch to answer some critical questions that will help them make their decision:
- “Are there red flags that suggest this isn’t a good fit for me?”
- “Do I believe in the leadership team and their vision?”
- “Is this an investment I can make and does it make sense for my family?”
- “Have other people like me succeeded as franchisees with this company?”
- “Will I be happy and successful if I join this franchise family?”
The same should hold true for franchise marketing firms, regardless of the services they offer -- PR, social media, content marketing, web development, design/creative, etc. Franchisors should have the opportunity to review an FDD-like document within which the agencies they’re exploring or reviewing share the good, bad, and ugly about their company. Franchisors must be transparent with their prospects. So, too, must marketing agencies be transparent with franchisors.
That’s why we’ve developed the MDD -- “Marketing Disclosure Document” -- just in time for the 2016 IFA Annual Convention.
Introducing the Marketing Disclosure Document Concept
The MDD functions just like the FDD -- a thorough and agnostic tool through which franchisors can evaluate potential and current marketing partners. In fact, we are encouraging our competitors and clients to weigh in during or after the convention so we can establish the gold standard for marketing agencies to self-report on their company just as franchisors are required to self-report on their franchise opportunity.
In our minds, the more our current and future clients know about our strengths and weaknesses as an agency (and vice-versa), the better our partnership will perform. All relationships, business or personal, have a significantly greater chance of long-term success when both parties enter the relationship with a completely transparent and thorough understanding of who the other person or company is and what a successful and happy partnership looks like.
Knowing that, it is our hope that MDD requests become the standard procedure within franchising, allowing franchisors to conduct their very own due diligence process before aligning themselves with marketing partners who are the best fit for their culture and business objectives.
A Deeper Dive into the MDD
As mentioned, we’ll reveal the MDD in beta form during the 2016 IFA Annual Convention. We will hand out printed copies at our trade show booth -- No. 632 -- throughout the show and will share a digital version via our LinkedIn company page (http://bit.ly/1OoyIcf) when the show begins February 20. We encourage a all franchisors, franchisees and suppliers to provide their comments or feedback via LinkedIn, on FranSocial or in person during the convention.
In the meantime, here’s a sneak peek at 10 things the franchise community will find within the 16-item MDD when it’s released.
- The Strategic Planning Process: How does the company create the winning playbook for success? Does it include action items, competitive insights and clear, measurable goals that have been set mutually? How many times has the process been used and by what companies? Is it ownable and comprehensive?
- The Numbers--Metrics and Measurement: How does the agency measure success? The goals need to be clear, measurable and achievable. Without goals, no one wins.
- The Pitch Team v. The Account Team: Is the management team or senior level staff directly involved in the business after the sales pitch? We all know the stereotypical agency story where the pitch team is awesome but the people assigned to the account are junior and clueless.
- The Hours and The People: Will the franchisor have the opportunity to influence the people working on the account and meet them personally? Does the agency provide transparency over the hourly rate and how often which people are working on the business? Big questions that deserve real and thorough answers.
- The Agency’s Size and Current Relationships: Who does the agency currently work with? What’s the budget for its typical client engagement? Some franchisors like to be the proverbial “big fish” working with a smaller agency. Others don’t mind swimming in a “larger ocean,” partnering with an agency that services dozens of other accounts. What’s the right fit for you?
- The Evaluation Process/Scorecard: How does the agency work with clients to evaluate partnership performance? Is there a clear method for evaluating performance? We recommend a quarterly “scorecard” based on the same values and performance metrics the agency uses to measure its employees. This ensures everyone is working toward the same goals.
- The Agency’s Experience: Dig deep into the agency’s experience. Most firms have a nice client list, but do they have current and relevant experience working on accounts that you feel parallels your size, your franchisees, your goals and your likely service needs? Do the people assigned to your account have the experience or was it years ago?
- The Agency’s Key Differentiator: What is it...and better yet, can the agency eloquently describe it? If it cannot share its own, how can it effectively share yours? Make certain you are crystal clear on the agency’s key differentiator and true core competencies so you’re partnering with a firm who can help you solve your brand’s major problems.
- The Agency’s DNA: What kind of agency is this and what services does it offer. What, specifically are its core competencies? Is it strictly a PR firm or social media firm? Only focus on franchise development? Or, is it an integrated company that can provide a more comprehensive solution? What option best fits with your internal resources?
- The FUN Factor: Chemistry matters in all relationships. Do you want to work with this team? Does its culture fit with yours? Does it come off as too stuffy and elitist, or conversely, too laid back for your taste? Does its passion and competitiveness resonate? Or does it seem too combative? Regardless, like any other relationship, trust your gut – if it feels right, believe it.
David Chapman is CEO of 919 Marketing. Find him at fransocial.franchise.org.